Since the original announcement of Episode Three more than ten years ago, Valve has released several blockbuster hit games, including Portal and Portal 2, Team Fortress 2 and Left 4 Dead. But despite the success of these titles, Half-Life 3 was never rolled out to the masses, instead earning the top slot among the most famous pieces of vaporware. What was originally touted as the last "in a trilogy…that will conclude by Christmas of 2007" has become nothing more than whispers in the dark.
As time went on, the company line on Episode Three from creator Gabe Newell evolved from firm commitment to vague mentions to complete refusals to comment whatsoever. If you'd like to see this evolution yourself, you can watch a chronological supercut of Newell interviews that fans put together to celebrate the ten-year anniversary of the original announcement. Of course, as Newell's comments about the franchise grew smaller, fan hype over the series has grown ever larger. With the success of the other aforementioned Valve games, fan expectations have grown incredibly high—so high that Newell and Valve may be afraid any Half-Life title they release may never live up. After all, just look at what happened to Bioware with Mass Effect 3.
Update 1/18/17: During a Reddit AMA, Gabe Newell again gave nothing but the vaguest of answers regarding Half-Life, explaining that "it's hard for me to look at [the Half-Life games] as anything other than a series of things I regret." That being said, Newell did give fans a tiny glimmer of hope when he said there was a chance of new content and games being developed in the Half-Life/Portal universe, as well as new single-player titles coming from Valve. Additionally, the rumored Half-Life movies are apparently still in the development pipeline.