Some sleuthing inside the Source Filmmaker’s script files by ValveTime has uncovered a number of clues that appear to point toward the existence of a next-gen Source Engine.
Source 2 is referenced over 60 times in code strings within the files, and Source 2 icons have also been located.
The most compelling code evidence is probably the following:
“If key doesn’t doesn’t exist, assume ‘Source’, otherwise invalid — assume next-gen ‘Source 2′.”
Even Valve’s own website appears to be teasing the next version of its game development environment, with the following statement under its description of Source:
“Source is considered the most flexible, comprehensive, and powerful game development environment out there. And it’s about to get even better."
We'll have more as the story develops.