With a history of developing some of the greatest games ever made—Half-Life, Portal, Counter Strike, Team Fortress, to name a few—the VR space has high hopes for the three VR games that the company has confirmed it’s developing. But some have taken recent layoffs as a sign that Valve’s interest in VR is waning. Valve head Gabe Newell recently took his to inbox to answer some questions, including affirming that the company is still working on its VR titles.

It was just a few weeks ago that Valve confirmed that it had laid off 13 full time employees and an undisclosed number of contractors. The layoffs are believed to have largely impacted the company’s VR hardware group.

Valve maintained that the layoffs don’t “represent any major changes at the company,” but that didn’t stop fans from writing directly to Valve head Gabe Newell for reassurance.

Valve News Network, a YouTube channel focused on the company, recently collected a handful of email responses from Newell and summarized them in a video. A few of the emails pertained to VR specifically.

One straightforward email got a suitably straightforward response:

Q: Hi Gabe, are the three VR titles still coming?

A: Yes.

Another email went into a bit more detail about Valve’s modern approach to game design:

Q: Is is accurate to say that Valve is making a shift (even if a minor one) away from developing software/game titles in favor of developing hardware?

A: We think of it as increasing the range of design choices that are available to use as game developers.

If you are a mod, you are limited to the choices of your host game.

If you are a game, you are limited to the choices of your engine.


By being able to design hardware at the same time we are designing a game, we think we will be able to build better games. Hopefully this is more obvious when Knuckles ships.

Knuckles EV3 | Image courtesy Valve

The last part of Newell’s email suggests that Knuckles—the company’s next-gen VR controllers which have been in development for years—will ship with at least one of Valve’s VR games.

Although Valve has been much more open about the progress of Knuckles in the last year, the company has steered clear of talking about the games they are building alongside them. The fact that Knuckles seem in many ways to be complete, but that Valve still hasn’t hinted at a release date, further suggests that the release may be dictated more by the games that Valve is working on than the controller hardware.

Valve first confirmed its work on three VR games back in February, 2017, and at the time described them as “three full [VR] games, not experiments.” That means that the company has been working on the games for at least two years now.

Valve Psychologist: Brain-computer Interfaces Are Coming & Could Be Built into VR Headsets

As with the more recent email, Newell had at the time also explained the company’s belief in building hardware and software together.

“One of the questions you might be asking is ‘Why in the world would you be making hardware?’ What we can do now is we can be designing hardware at the same time that we’re designing software,” Newell said, according to Eurogamer. “This is something that [Nintendo’s] Miyamoto has always had. He’s had the ability to think about what the input device is and design a system while he designs games. Our sense is that this will actually allow us to build much better entertainment experiences for people.”

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Ben is the world's most senior professional analyst solely dedicated to the XR industry, having founded Road to VR in 2011—a year before the Oculus Kickstarter sparked a resurgence that led to the modern XR landscape. He has authored more than 3,000 articles chronicling the evolution of the XR industry over more than a decade. With that unique perspective, Ben has been consistently recognized as one of the most influential voices in XR, giving keynotes and joining panel and podcast discussions at key industry events. He is a self-described "journalist and analyst, not evangelist."
  • kuhpunkt

    “The layoffs are believed to have largely impacted the company’s VR hardware group.”


    Alan Yates: I am still at Valve, still working on VR R&D with the original
    core team and a bunch of people you’ve never heard about that have
    joined over the years.

    The rumor mill has been running overtime lately! As Gabe has
    confirmed, yes Valve let some people go. VR wasn’t the main group
    affected, it certainly wasn’t half the FTEs in hardware. As you can see
    from the jobs website we are still hiring for VR and other
    hardware-related skills.

    Does anyone really believe we would abandon a nascent media like VR,
    especially one we have such a significant position in? Hardware is of
    great strategic importance to our future, VR and otherwise, abandoning
    that capacity would be stupid.

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  • DanDei

    It is damn time Valve releases some (in a sense) 1st party VR content. They released this great platform three years ago next month and then really didn’t do anything with it hoping that other companies would invest into building on it. As much as I disliked the Oculus exclusive deals as a VIVE owners I think they got it right. You need to have some studios funded with platform holder money to set the bar. Valve just left the field to the tinyest indi developers who oftentimes couldn’t afford to produce real eye catchers. I think they were hoping for something like a VR counterpart (not gameplay wise but in popularity) to CounterStrike or DOTA to just spring out of a dedicated community. Valve’s content support has been more than lackluster, they are a negligent parent to their VR baby.

    • Gerald Terveen

      that is not very fair imo. not only have they released fun and free content for launch, they also evolved the platform in so many aspects. as for content – you don’t just make something and throw it out if your aim is a system seller level event.
      what they did is supply tons of developers with free hardware, maybe even fund the one or other title. who knows if we had a budget cuts without that.

      their strategy seems to really make a step forward on VR on the hardware as well as content side and I rather wait for something that sells systems than get something to waste a few hours today. Because selling systems is what will get us into the situation where content on a AAA level comes from many developers.

  • Darth Buzzer

    HLVR has been leaking for almost 4 years, so it’s safe to say the game has been in development for a long, long time. The other 2 VR games appear to be in Unity rather than Source 2, so other than the first confirmation in early 2017, we don’t know any earlier timeframes.

    2019 is likely the year of the 3 games, or at least one. If not, then 2020 for sure assuming no cancellation. If anything, an announcement/reveal in 2019 is definitely happening.

    • WyrdestGeek

      Yeah. But while it makes sense that they dare not release too early, before it’s actually done, if they wait too long, they risk Duke Nukem Forever levels of irrelevance.

      Weirdly, the slow rate of adoption of VR kind of helps them here.

      That and the fact they they own the very popular, near-industry-lock-down online store named Steam.

      Although having to buy a piece of additional hardware to play the game could slow down the initial adoption.

  • DaKangaroo

    Valve I love you but please for the love of GLaDOS hurry the fuck up lol.

    It’s been a really long time since we’ve had ANY good games from Valve, people are legit starting to wonder if the company that gave us L4D2, TF2, Half Life 2 and Portal 2 has ‘forgotten’ how to make games. Years of silence and nothing but a very very underwhelming card game does little to dispute that theory.

    What’s the hold up? Put some more people on it, get a crunch going, trim some fat from the feature wishlist, move a product out the front door.

    • kuhpunkt

      No, YOU hurry up!

    • Fred

      trim some fat from the feature wishlist, move a product out the front door

      2 weeks later:

      “why the hell did they release an unfinished game and wtf is with all this day-one DLC?!?”

      • HybridEnergy

        Agreed, Oculus funds games faster out the door but they feel more like a “taste” of AAA rather than the full thing. All those games end suddenly and too fast (I’m looking at you Lone Echo).

    • Shotgundam009 ­­­­­­­­­­­­­­­­

      Well if they really have been working on 3 different games for 2 years, it seems reasonable. I do agree that they should show a teaser or something unless it wouldn’t look like the final version at all. Then again i’m not a big Valve guy myself so the wait isn’t a big deal for me.

    • jj

      crunch time = rushed development = quality suffering

  • Raphael

    Can’t wait for the forthcoming Valve VR card game/tech demo. Oh wait… yes I can. I will wait for their second VR game scheduled Q4 2025.

  • Baldrickk

    No speculation on whether we will get the Valve HMD at the same time?

  • HybridEnergy

    I don’t know why you guys think it’s long if you want better quality games. How long do AAA titles for a flat screen not VR take to produce? In some cases 4-5 years. High end titles take years to make with studios filled with 100+ people with high budgets and extremely over-exaggerated expectations for profit.

    • Completely fair, but what’s also a reality is that perception drives market adoption. The perception of VR, driven largely by Valve’s inaction, is that there’s no good content to justify the hassle of buying and setting it up. Oculus has worked hard to push out smaller games that offer high quality experiences, but Valve has released nothing but cool demos. As an owner of both the Vive pro and the original rift, I was fairly disappointed by the Rift S announcement, but I’m still considering using it to replace both of my current headsets, simply because Oculus has put their money where their mouth is and created content I want to come back to. If Valve doesn’t release something really compelling soon, the entire Vive platform is going to die.

      • HybridEnergy

        I don’t think Valve wants their image ever to be short small but quality experience. Let them take their time an release something bigger. I like Oculus for investing millions in content as well, I just simply use Revive no problem.

      • Żéñ Źdźbło

        So the Rift S has inside-out tracking and wirelessly connects to a PC?

  • brandon9271

    So… Knuckles will drop and be compatible with all major VR headsets…? That seems like a possibility. It’s already possible to get the HTC Vive wands working with WMR headsets like the Odyssey with some tweaks. If Knuckles would work with WMR headsets, Rift and Rift S (all of which have sub par controller tracking) that would be AMAZING. Especially if Knuckles were bundled with a pair of lighthouses for around $200. Sure, that sounds cheap but only because we’re used to HTCs ridiculous pricing.

    • kontis

      It will “work ” with any headset as long as you have lighthouse base stations and synchronize both tracking volumes together…

      There are Rift uses with Vive trackers for full body tracking. It does work, but is a bit cumbersome.

      • brandon9271

        Ideally Valve would create a more robust, user friendly way off aligning the two tracking volumes OR just include a third tracker to mount on the HMD so there’s only one tracking volume to worry about. One can dream…

    • IanTH

      Lumping Rift in with WMR and calling all of them “sub par” is pretty disingenuous.

      • brandon9271

        Yeah, I really just meant Rift S and WMR. I own a Rift CV1 and it tracks perfectly fine once it’s setup. The setup can be a pain in the arse but that’s a different issue. I’ll edit my post if it will let me.

        • Downvote King

          Isn’t Rift S tracking supposed to be much better than WMR?

    • Etailer

      Your dreaming. Knuckles with 2 lighthouses would be a great price at $450

  • Robert1592

    Valve has this “we’ll tell you nothing and you’ll just have to accept it” policy. Oddly the public seems to assume it means that Valve is doing great things, really great things.
    That makes no sense to me at all. Every other developer talks about their upcoming project constantly and builds anticipation so the public are eager to buy it when released. Valve won’t even tell us what type of game it is, or even a title and to make matters worse they have a tendency to just kill projects on a whim. Valve’s competitors are starting to release upgraded headsets and showing exciting things, while Valve hints at Mind control systems that are more fantasy than fact and have very little bearing on VR, games, or what we actually want. All these things point to an unfocused company that has no idea what to do next, or how to do it. I was eagerly looking forward to knuckles but if they’re holding it off to release some quickly put together game then I’m more likely to get the latest oculus device than wait an indefinite amount of time with absolutely no information to go by. Its just bad business behavior.

    • Żéñ Źdźbło

      All excellent points. However, based on the limited information we have, and knowing Valve’s history, and (especially) knowing the quality of The Lab, their VR titles are more likely to be outstanding than flops. In saying that, stranger things have happened so they could very well turn out to be flops, it’s just unlikely in my view.

      • Robert1592

        That’s quite an assumption you’re making. Just a reminder, after years of silence they put out a card game recently, Artifact. It has not been well received and highly criticized for its monetization model. Also the people who developed many of those Valve favorites are no longer working for valve.

        • Żéñ Źdźbło

          No assumptions here, all facts. There are more reasons to think their VR titles will be outstanding than flops. There are many things I could cite but I wouldn’t know where to begin. Maybe start here youtube.com/user/MrZulubo/videos

  • Knuckles are perfect for Half Life VR