Two engines share a confusing name and a single reputation. Source is the 2004 engine behind Half-Life 2, Portal, Team Fortress 2 and Garry’s Mod. Source 2 is the 2015 engine behind Half-Life: Alyx, Counter-Strike 2 and Deadlock. They are separate codebases with separate licences, separate tooling and separate answers to the question most people actually arrive with: can I use this?
That question is where nearly every page on this subject goes wrong, including this one until now. The word “Source” is not a statement about licensing. Source is source-available under a non-commercial licence. Source 2 is proprietary and has never been released as a public standalone engine or SDK. This page sets out what each engine is, what runs on it in 2026, exactly what Valve does and does not let you do with it, and which rumours about the next Half-Life are worth anything.
Source and Source 2 at a Glance
| Source | Source 2 | |
|---|---|---|
| Developer | Valve | Valve |
| Debut | October 2004, with Half-Life 2 | Announced at GDC, March 2015; Dota 2 ported that September |
| Written in | C++ | C++ |
| Physics | Havok | Rubikon, Valve’s in-house system |
| Licence | Source-available, non-commercial (Source 1 SDK Licence) | Proprietary — no public licence |
| Public SDK | Yes — Source SDK 2013 on GitHub | No standalone SDK; tools ship inside specific games |
| Predecessor | GoldSrc | Source |
| Still used? | Yes — TF2, Garry’s Mod, mod scene | Yes — CS2, Dota 2, Deadlock |
Is the Source Engine Open Source?
No. Neither of them is, and the name is the reason everyone thinks otherwise.
- Source 1 is source-available. Valve publishes the Source SDK 2013 on GitHub, and you can read every line of it, but it is distributed under the Source 1 SDK Licence on a non-commercial basis. That is a fundamentally different thing from an open-source licence like MIT or GPL: you may not sell what you build with the public SDK. Commercial Source games have existed, but through separate licensing agreements negotiated with Valve, not through this SDK.
- Source 2 is proprietary. There is no repository, no SDK download and no licence to buy. When Valve announced it in 2015, Gabe Newell said the intention was eventually to make the engine free for developers, prioritising Valve’s own games first. Eleven years later, that general release has not happened.
If you have seen Source 2 described as open source — as this page said before this update — it is a straightforward confusion between the engine’s name and its licence.
What You Can Actually Build
Three routes exist, and as of 2026 one of them will get you to a commercial release.
1. Source 1, through the Source SDK 2013. Free, public, on GitHub, and genuinely capable — this is the codebase behind Half-Life 2 and its descendants. In February 2025 Valve added the full Team Fortress 2 client and server code to it, which was a significant shift: mod makers can now change, extend or rewrite TF2 outright rather than layering content on top. Valve’s terms are explicit that “any mod created using the SDK must be free”, and that content inside those mods must be free too.
What you get in return is real: TF2 mods can be published on the Steam store as their own listings, appearing as separate entries in the Steam library. That is not theoretical — Team Fortress 2 Classic, a long-running community project, relaunched on Steam as Team Fortress 2 Classified in January 2026 on the back of that SDK release. Valve even ships a demonstration mod, Frog Fortress 2, to show the pipeline working.
2. Source 2, through Workshop tools. There is no Source 2 SDK you can download on its own. Instead, Valve ships Source 2 authoring tools inside particular games — Dota 2, Half-Life: Alyx, Counter-Strike 2 — so you can build maps, models and custom modes for that game. It is a genuine version of the engine’s toolchain, but the tools are tied to the specific Valve game they ship with rather than being a general-purpose Source 2 SDK.
3. s&box, and this is the one that changed. Facepunch Studios — the Garry’s Mod developer — builds s&box on Source 2 under licence from Valve, and it released on Steam on 28 April 2026. Two things about it matter more than the release itself. Facepunch open-sourced its own C# layers under the MIT licence in November 2025, though Valve’s Source 2 core underneath stays proprietary. And in March 2026 Facepunch signed an agreement with Valve that lets creators export s&box projects and publish them as standalone Steam games, royalty-free. That is the closest thing to a commercial route onto Source 2 technology that has ever existed outside a private Valve deal.
If you want to sell a game built on Valve’s own engine directly, you still cannot. The Source SDK is non-commercial and Source 2 has no public licence; s&box is a Facepunch product with Facepunch’s terms, not a Valve SDK. For a conventional commercial engine, use Unreal Engine if you want comparable fidelity and a royalty model, or Godot if you want no royalties at all. Choosing between them is largely a language and tooling question, which our guide to the best programming languages for game development unpacks.
Games Built on Source
Source’s reach goes well past Valve, which is the part most engine directories underplay.
| Game | Year | Developer | Notes |
|---|---|---|---|
| Half-Life 2 | 2004 | Valve | The engine’s debut, alongside Counter-Strike: Source |
| Vampire: The Masquerade – Bloodlines | 2004 | Troika Games | Shipped on Source the same year as Half-Life 2 |
| Team Fortress 2 | 2007 | Valve | Still running; full code released to the SDK in 2025 |
| Portal / Portal 2 | 2007 / 2011 | Valve | Shipped in The Orange Box and standalone |
| Left 4 Dead / Left 4 Dead 2 | 2008 / 2009 | Valve | |
| Garry’s Mod | 2006 | Facepunch Studios | The sandbox that made Source a platform |
| Dear Esther, The Stanley Parable | 2012 / 2013 | The Chinese Room, Galactic Cafe | Both began life as Source mods |
| Counter-Strike: Global Offensive | 2012 | Valve | Replaced by Counter-Strike 2 in 2023 |
| Titanfall / Titanfall 2 / Apex Legends | 2014–2019 | Respawn Entertainment | Heavily modified Source |
Games Built on Source 2
| Game | Year | Developer | Status |
|---|---|---|---|
| Dota 2 | 2015 | Valve | Ported from Source as “Dota 2 Reborn” |
| The Lab (Robot Repair) | 2016 | Valve | VR showcase |
| Artifact | 2018 | Valve | Discontinued |
| Dota Underlords | 2019 | Valve | |
| Half-Life: Alyx | 2020 | Valve | The engine’s VR flagship |
| Aperture Desk Job | 2022 | Valve | Steam Deck tech demo |
| Counter-Strike 2 | 2023 | Valve | Replaced CS:GO outright |
| Deadlock | Unreleased | Valve | Publicly playable during development; no release date |
| s&box | Released 28 April 2026 | Facepunch Studios | Source 2-based creation platform; the most prominent non-Valve project on the engine |
What Changed Between Source and Source 2
Source 1’s defining trait was incremental evolution: Valve shipped it in branches tied to games — the 2006 branch with Half-Life 2: Episode One bringing HDR and colour correction, the 2007 branch with The Orange Box bringing a threaded particle system and a substantial refactor to use multiple CPU cores. There were no version numbers, just engine branches, and mods had to be ported forward when a branch moved.
Source 2 was a clean break rather than another branch. The headline changes are a 64-bit architecture, Vulkan alongside DirectX, physically based rendering, volumetric lighting, and Rubikon, Valve’s own physics system replacing the Havok middleware that Source 1 licensed. The engine’s stated purpose at announcement was content-creation speed — making it faster for creators to build, not just faster to run.
The practical difference for anyone reading old documentation: material, model and map formats changed, Hammer was rebuilt, and Source 1 knowledge transfers as concepts rather than as procedures.
What About Half-Life 3?
Worth addressing directly, because the search results around it are mostly noise.
Dataminers have found references to an internal project called HLX in update files for Dota 2, Counter-Strike 2 and Deadlock since roughly 2021, and those references have continued to appear through 2026. Community figures who have correctly called Valve projects before — Tyler McVicker among them — have described a Source 2 Half-Life project in an advanced state.
None of that is an announcement. Valve has announced no such game, and no Half-Life title shipped alongside the Steam Machine despite widespread reporting that one would. Reporting through 2025 and early 2026 suggested it would launch alongside the Steam Machine; the Steam Machine has since shipped, and no Half-Life game came with it. By mid-2026 the same insiders were saying 2026 may no longer be the target. Treat every date you see as rumour until Valve says otherwise — this is the single most rumour-heavy topic in PC gaming, and the pattern of confident predictions followed by silence now runs to well over a decade.
Key Takeaways
- Source and Source 2 are different engines, not versions of one. Source debuted in 2004; Source 2 was announced in 2015.
- Neither is open source. Source 1 is source-available under a non-commercial licence; Source 2 is proprietary with no public SDK at all.
- Source SDK 2013 is free and on GitHub, and since February 2025 it includes the full Team Fortress 2 client and server code.
- TF2 mods can ship on Steam as standalone games — but they must be free, as must their content. Team Fortress 2 Classified did exactly this in January 2026.
- Source 2 tools ship inside games, not as a downloadable SDK. What you build stays inside Valve’s product.
- s&box released on 28 April 2026. Facepunch’s Source 2-based platform is now the one route to a royalty-free standalone Steam release built on Source 2 technology, under a March 2026 agreement with Valve.
- Half-Life 3 is unannounced. HLX references in Source 2 game files are real; every release date attached to them is rumour.
Frequently Asked Questions
Conclusion
Source is one of the most influential engines ever shipped, and its influence came mostly from what people built on top of it: Garry’s Mod, The Stanley Parable, Dear Esther and the entire Counter-Strike competitive scene all started as somebody modding Valve’s work. The February 2025 SDK release, which let TF2 mods become standalone Steam games, was Valve leaning back into exactly that.
Source 2 is a different proposition. It is the newer generation, with a substantially rebuilt rendering, tooling and physics stack, and it remains far more closed to independent developers — though s&box has opened a door that did not exist two years ago. If you came here looking for an engine to build a product on, that is worth knowing before you spend a weekend on the SDK. For engines with commercial terms, our directory of 100+ C and C++ game engines sorts the field by licence and category.
