What if the most anticipated game in history will never exist because its predecessor was too successful?
Valve makes $10.8 billion annually from Steam. That’s billion with a B, generated by taking a 30% cut from every PC game sale. When you understand this number, the absence of Half-Life 3 stops being a mystery and becomes inevitable corporate logic.
Here’s the math that killed Gordon Freeman’s story. Rockstar will spend an estimated $2 billion developing GTA 6. Valve will collect hundreds of millions from that single release without writing a line of code, modelling a single texture, or fixing a single bug. They built the perfect business model: other companies create, Valve collects rent.
Every indie sensation, every AAA disaster, every early access scam that sells on Steam puts money in Valve’s pocket. They own the infrastructure while everyone else does the work. Why risk years of development and potential failure when you’re essentially printing money from other people’s creativity?
This creates the Half-Life 3 Paradox as we discussed in episode 03 of the Grumpy Old Gamer podcast. The more successful Steam becomes, the less reason Valve has to make games. Success eliminated necessity. Half-Life 2 didn’t just pioneer physics-based gameplay and force Steam adoption in 2004. It accidentally taught Valve that platforms generate more money than products.
Consider the risk equation. Half-Life 3 carries impossible expectations after two decades of anticipation. Any release would face comparison to games that exist more in collective memory than reality. Meanwhile, Steam commands roughly 70% of PC gaming distribution. Even Epic Games Store, with better developer revenue splits and free weekly games, struggles against Steam’s market dominance.
Valve transcended the need to create content. They became digital landlords collecting rent from an entire industry. Rockstar must keep making Grand Theft Auto games because that’s their only revenue stream. Valve can sit back and profit from Rockstar’s work, along with every other developer’s efforts.
The irony cuts deep. Half-Life 2 forced players to install Steam, which seemed like intrusive DRM at the time. That “annoying” requirement became the foundation for a distribution monopoly so convenient that consumers barely notice they’re locked in. We complained about being forced onto Steam, then made it our primary gaming platform.
Steam’s success metrics tell the story. The platform that started as a way to distribute one game now generates more annual revenue than most major publishers’ entire catalogues. Valve learned that successful games make millions, but successful platforms make billions. They haven’t released a traditional single-player game since Portal 2 in 2011, and they don’t need to.
Even Half-Life: Alyx, released in 2020, served primarily as a VR platform showcase rather than story continuation. Valve uses their intellectual property to drive hardware and platform adoption, not to satisfy narrative completion. The story matters less than the ecosystem.
Every Steam purchase reinforces this cycle. When you buy games through Valve’s platform, you’re funding the very system that makes Half-Life 3 commercially unnecessary. We’re trapped in a perfect catch-22 where our support for the platform Half-Life 2 created eliminates the incentive for its sequel.
The numbers don’t lie, and neither does basic corporate behaviour. Companies follow profit, and Valve’s profit comes from distribution, not development. Half-Life 3 exists in a quantum state where its potential energy exceeds any possible kinetic release. The anticipation generates more value than the product ever could.
Valve won by learning when to stop playing.
If you ran a company making billions from other people’s work, would you risk that income stream to satisfy fan demands for a sequel that might disappoint?
