As you know EP2 was 2007 and now even in 2011 they still haven't even announced they are working on it.
Here is my guess
2011> portal 2, dota 2 that is a definite.
2012> left 4 dead 3
2013> left 4 dead 4, portal 3
2014> left 4 dead 5 and maybe dota 3
2015> new consoles and Episode 3 might be released unless they have abandoned it.
Also a good point is games like left 4 dead and portal are easier to make because they lack story depth.
So maybe valve has just become another money hungry game company and gave up on half life because they are making more money with their easier to make games.
Anyway when do you think it will come out if at all.
They are working on it, they've been working on it for a very long time. But every time we heard anything about Ep3 it was Valve adding more things to it, or getting sidetracked with research.
For example, they were researching proper sign-language and integrating that into their character animation engine, and that was going to get used with Alyx talking to Dog (apparently she had a deaf friend growing up).
So if that's the case, for example, Valve will get the signing correct before they put it into the game - big delays.
Also look at the graphical quality of Portal 2 - they've obviously been working on a massive Source upgrade (as they did with the previous 2 episodes), so these things take time too.
Yes, Team Fortress, Portal and Left For Dead seem to have focus, but they do bring in the money used for research and development for other things. I don't see Valve ever dumping the Half Life franchise because that's what put them on the map, but I do concur that it's taking the piss now how long Ep3 is taking.
Valve has been known to release things late, they don't rush into things and it makes their games overall enjoyable. Money hungry? Money hungry would be releasing a sequel every year, where Left4dead3 has never been mentioned except on sites and forums that want to mock Valve on it's quick release.
It seems their interested in constantly upgrading their engine with features, it could be useful seeing how the new Source engine competes against Unreal's free UDK. The biggest thing is Portal 2s liquid, where it appears to be optimized to work with the engine and act dynamic.