Gabe Newell has confirmed that Valve is indeed working on Source 2 Engine.
The confirmation came during Newell's birthday where fans from the 4chan.org's /v/ board visited. One of the fans asked whether Valve is currently working on a new Source engine to which Newell said, "We've been working on new engine stuff for a while," according to Joystiq.
Newell added, "We've just been waiting for a game to roll out with it." Someone asked Newell to elaborate whether it's "more than just an extension to Source", specifically hinting at a completely new engine, and Newell replied, "Yeah."
So there you have it. Newell also revealed that Ricochet 2 is being developed at the moment.
Check out a video from the birthday visit (including the comments about Source 2 Engine) above.
