We may never know what happened to the plans for Half-Life 3, or at least Half-Life 2: Episode 3, as the famous franchise has seemingly disappeared from Valve's agenda and become just a running internet joke. What we do get, at least, are images of Half-Life 2 recreated in the Unreal engine, showing us how good updated Half-Life graphics could look, even though the original games run on the Source engine.
Polycount user Logithx recreated Half-Life 2's infamous starting area, City 17, in Unreal Engine 3, producing some great-looking results. The Source engine looked pretty good at its time, but the older versions of it are pretty dated now. The gritty nature of the Unreal engine suits the game's atmosphere very well, and Logithx has done nice work recreating some recognizable areas.
The update Source engine can produce some attractive results, and if some form of a new Half-Life game ever did emerge, that's almost definitely would it would be running.
Logithx personally "can't wait to get going" with Unreal Engine 4, and wants to recreate more of Half-Life 2 in it as opposed to continuing to work in Unreal 3.
Source: Eurogamer
