‘Half-Life: Alyx’ is Now Five Years Old. What’s Next for Valve in VR?

Five years after Half-Life: Alyx reshaped expectations for VR gaming, Valve remains a quiet yet critical force in the industry. Despite little fanfare, the company has continued to shape the VR landscape through steady updates to SteamVR, integration with standalone headsets like Quest, and whispers of new hardware and games. Now, as the fifth anniversary of Alyx passes, the question looms larger than ever: is Valve still all-in on VR, or is it slowly retreating from the frontier it helped define? Here’s what we know.

All it takes is one little global pandemic and—boom!—Half-Life: Alyx is five years old. Though it only felt like two or three years for many of us.

In fact, the pandemic nearly postponed the launch of the game altogether. Half-Life: Alyx launched in March of 2020—the same month that much of the US began issuing stay-at-home orders in an effort to slow the spread of COVID-19. Many businesses were disrupted overnight; those lucky enough to have a business model that could be done remotely had to scramble to figure out how to keep the gears turning while business was anything but usual.

That included Valve Software, the developer of Half-Life: Alyx. Had lockdowns hit just a few weeks earlier, the company has said it very well could have disrupted the launch of the game. In fact, the pandemic led the company to cancel its only Half-Life: Alyx press preview event. Luckily the game still made it out the door on its scheduled March 23rd release date.

Half-Life: Alyx has been hailed by many not just as the ‘best VR game’, or ‘best Half-Life‘ game, but even one of the ‘best games ever’. Five years later, the game holds the 24th spot on Steam250’s list of the best rated games on all of Steam.

But Valve has done more than make one of the best VR games to date. The company’s ‘Index’ VR headset long stood as the premier choice for PC VR, and let’s not forget that Steam’s comprehensive VR support has made it the lifeblood of the PC VR industry in the last five years.

Despite having such an impact on the shape of the VR landscape, Valve has been very quiet about its plans for the category in the last few years. There’s been essentially zero official announcements of any major plans (like a new VR game or headset).

So then, what is Valve up to in VR—if anything? Here’s what we know.

What’s Next for Valve in VR

For one, we shouldn’t disregard that SteamVR has remained the singularly most important PC VR platform to date. The company has made slow but meaningful updates to SteamVR over the years. The biggest addition in recent years came at the end of 2023 when Valve unexpectedly launched the Steam Link app for Quest headsets, which made it more convenient for Quest users to play SteamVR games wirelessly from their PC.

And it sounds like Valve isn’t done with Steam Link. Recent datamining from reliable sources points to the company working to launch Steam Link on new headsets like the Vive Focus headsets from HTC and Pico headsets from Bytedance.

Further, it seems that Valve has more plans to improve wireless PC VR for standalone headsets. References found in recent Valve software point to a “SteamVR Link Dongle,” which is increasingly expected to be a USB device to create a dedicated wireless link between the user’s PC and headset.

Currently, when you use Steam Link, your headset needs to connect to your router and then your router needs to connect to your PC. If you’re playing within a room or two of the router, it’ll probably work just fine. But for people with subpar wireless setups (or those that want to crank their bandwidth to the max for the best quality), it’s not uncommon to see connection-related quality issues like stuttering or pixelation.

Assuming it works like expected, a SteamVR Link Dongle would create a direct connection between the PC and the headset. Not only would this cut out the middleman of the router, it would also mean having a wireless connection of known capability that would allow Valve to fine-tune things for the most seamless PC VR experience. Datamining suggests the dongle would use Wi-Fi 6E.

It’s unclear if the SteamVR Link Dongle would support third-party headsets like Quest, or if it’s being designed as an accessory for Valve’s long-rumored ‘Deckard’ headset.

Valve’s Next VR Headset

After the 2019 launch of Index, the first serious hints that Valve was working on a new VR headset came in the form of patents that filed in 2020. The patents envisioned several ideas from the company including a fully standalone headset and a number of ergonomic designs.

It’s been five years since those patents were first published. And despite no definitive announcement that a new headset is in the works, a drip of clues from Valve itself and datamining efforts suggest the company is still actively working on a new VR headset, even if it is happening on Valve Time.

It was just a few months ago that a 3D model of previously unseen VR controllers—believed to be designed for Valve’s next headset—showed up in recently updated SteamVR files. The controllers didn’t just provide fresh hope that Valve was still at work on a new VR headset, they also hint toward the way the headset will be positioned.

Valve’s ‘Deckard’ headset (which may be branded as ‘Index 2’) is thought to be a standalone headset that primarily streams content from a host PC running SteamVR. This is essentially the same thing that anyone using a Quest headset and Steam Link uses today.

But the layout of the leaked Deckard controllers—which has a traditional layout with a D-pad on the left side and four face-buttons on the right side—suggests that Valve could position the headset for both VR games and playing flatscreen VR content on a huge virtual screen.

After all, SteamVR already supports playing flatscreen games on a big virtual screen. But because almost all VR controllers today don’t quite mirror standard gamepads, input compatibility isn’t guaranteed. Which means if you want to go from playing a VR game to a flatscreen game on a virtual screen, you may need to set down your VR controllers and pick up a gamepad.

If the Deckard controllers stick with the traditional gamepad layout, it could be much easier for players to move between VR games and flatscreen games and back again.

Even more recently than the controller leak, a leaker who has revealed accurate info on a number of Valve-specific projects in the past claims Valve’s next headset will launch in 2025 with a price of $1,200.

While we can’t independently verify that claim, there’s at least some evidence that it might not be a total farce.

Brad Lynch, a dataminer who has established himself over the years as a reliable source of Valve-related info, uncovered newly added references to “Deckard EV2” in the latest release of SteamVR just last week.

EV2 likely refers to a second “Engineering Validation” device, which suggests the headset is getting closer to production. There could surely be an EV3 or EV4 to come, but according to Lynch, Valve’s Steam Deck OLED handheld reached EV2 before heading to production. Further, he says “I’m very confident [Valve’s next headset] will be revealed this year.”

Valve’s Next VR Game

Half-Life: Alyx launched back in early 2020 to near universal acclaim. Five years later it remains one of the largest and most polished VR games ever made. Even so, it’s unclear if the company was happy with the sales performance of the game compared to the time and resources required to make it.

Whether or not Valve will commit to making another VR game of that scale is still an open question. But here’s what we know.

Last month, the same Valve leaker that claimed the Deckard headset would launch in 2025 also claimed the company is nearly set to ship games or demos “that are already done,” specifically for Deckard.

This aligns with details from Tyler McVicker, a long-time Valve dataminer who previously unearthed significant details about Half-Life: Alyx in the years leading up to the game’s launch.

Less than a year ago McVicker said he found evidence that Valve was building another VR game alongside work on the Deckard headset. And while Valve has plenty of major IP to draw from, McVicker believes the company’s next VR game will be another entry in the Half-Life series. Or it could be two entries in the series, technically.

McVicker believes the game will be an asymmetric co-op game where one half of the game is built for a flatscreen player on PC and the other half for a VR player.

“The computer player would always be Gordon Freeman, while the VR player would be Alyx Vance. The idea was that these two characters would interact, with the VR player experiencing Alyx’s story and the PC player experiencing Gordon’s story, both having cooperative elements between them,” he said.

Perhaps Valve envisions this game as a cohesive experience to unite its two latest hardware projects: Steam Deck and Deckard?

For Valve’s part, the company isn’t ready to confirm or deny its work on a new headset or VR game. We reached out to the company to ask if it had anything to share about its future VR plans at the five year anniversary of Half-Life: Alyx.

“We don’t have anything new to share right now but […] we’ve really enjoyed seeing all the cool experiences that folks have created and uploaded to the Half-Life: Alyx Workshop,” a spokesperson told Road to VR.

Valve is Unlike Almost Any Other Company

There’s something worth understanding about Valve that puts everything above into context. The company has a novel ‘flat’ management structure that’s not shared by any peer in the same weight class as Valve. Compared to most companies, Valve gives its employees significantly more freedom to decide what the company builds and releases.

As described by the Valve Employee Handbook, it’s largely up to employees at the company to choose what projects to take on, and to inspire others to join them. If an employee wants to work on something but can’t inspire others to help build it, that project probably won’t go anywhere.

But when a project does get traction, the group building it is generally comprised of people who genuinely believe in what they’re building. Aside from having the coffers to pay for world-class talent, this is a major reason why Valve punches far above its weight class despite having a relatively small workforce compared to industry peers.

Valve may not be releasing new headsets or VR games every year, but the steady improvements to SteamVR—and the occasional hints of something brewing behind the scenes—suggest there’s still a group within the company that genuinely believes VR is worth building.