The game is most likely dead and even if it’s released it will never meet players expectations.
It’s been ten years since Valve confirmed that Half Life 2: Episode 3 was in development. The date was May 24th, 2006 and the game was supposed to launch by Holiday 2007. The game was going to conclude the trilogy but unfortunately a decade later players are still waiting to get their hands on the game.
Back in 2015, Gabe Newell was asked when players can expect Half Life 3 and his response was pretty confusing. “The only reason we would go back and do a ‘super classic’ kind of product is if a whole bunch of people internally at Valve said they wanted to do it, and had a reasonable explanation for why it was. But, you know, if you wanted to do another Half Life game and you want to ignore everything we have learned in shipping Portal 2, and in shipping all the updates on the multiplayer side, that seems like a bad choice. So we will keep moving forward but that doesn’t necessarily always mean what people are worried that it mean.”
Over the last many years, a new Half Life game has either been mentioned or teased in some way or the other. Back in 2013, Valve’s employee handbook teased Half Life 3 and then in December last year Half Life 3 was mentioned in Steam database which Valve merely responded with “It aint us.”
In short, players are still anticipating the game but unfortunately Valve isn’t listening. There could be multiple reasons. They are doing great business with Steam and it makes no sense for them, business wise, to invest in a new Half Life game. Or second, the hype for the game is so high that Valve is sure that they won’t be able to meet player expectations.