In an interview with Geoff Keighley, Newell was asked if Half-Life 3 would ever see the light of day. Newell’s response was:
“The only reason we’d go back and do like a super classic kind of product is if a whole bunch of people just internally at Valve said they wanted to do it and had a reasonable explanation…So we’ll keep moving forward. But that doesn’t necessarily always mean what people are worried that it might mean”.
Considering the amount of success Valve has seen just distributing games, and the amount of funny hats bought on Team Fortress 2, Newell does not seem like he has the motivation to tackle a project like Half-Life 3. In the end, above all the “Lord Gaben” praising and the “Valve worshipping”, we have to keep into mind that it is still a business. Newell most likely would not want to spend much time wandering off the successful path the company has already found, and probably will not start on anything that would not lead to immediate success.
But for all the optimistic fans out there, even though Newell did kind of dismiss the idea of making Half-Life 3, he technically never said that they would not ever make a sequel either.