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Source Engine 2 in the works at Valve - report

Valve boss Gabe Newell has reportedly confirmed that the developer is working on a new version of its lauded Source engine.

The confirmation came during a visit to Valve headquarters by members of 4Chan's /v/ board, via a video of Newell meeting his birthday well-wishers which has appeared on YouTube.

According to captions supplied by the uploader, included a short Q&A where Newell was asked whether Source Engine 2 is in development.

"We've been working on new engine stuff for a while. We've just been waiting for a game to roll it out with," the subtitles say, although the audio is not clear.

Another visitor asked if it is an entirely new engine, and Newell confirmed; this runs counter to the developer's previous stance on iterative engine improvements.

A Source 2 reveal has been expected since mid 2010.

Thanks, Joystiq.

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