Alyx Turns Five: What’s Next for Valve in the VR Space?

It’s been five years since Half-Life: Alyx transformed the virtual reality scene, yet Valve’s role in the gaming industry remains as understated as it is pivotal. With minimal fanfare, Valve continues to play an influential role in VR through consistent updates to SteamVR, seamless integration with standalone headsets like the Quest, and low-key rumors of forthcoming hardware and games. As we mark Alyx’s fifth anniversary, a pressing question lingers: Is Valve fully committed to VR’s future, or are they slowly stepping back from the trail they blazed? Here’s a closer look at the current landscape.

Time sure flies—or at least that’s how it feels as we look back and realize Half-Life: Alyx is already five years old. Released in March 2020, right at the onset of the global pandemic, the game’s launch nearly faced a delay due to the chaos that ensued. With much of the United States entering stay-at-home orders, many businesses were abruptly disrupted, scrambling to adapt to remote operations. Valve Software, the genius minds behind Alyx, was no exception. Had the lockdown started a bit earlier, the game’s launch date might have been at risk. Thankfully, the team managed to debut the game on its planned March 23rd release without skipping a beat, despite having to annul its only press preview event.

Since then, Half-Life: Alyx has garnered praise from critics and players alike, being celebrated not just as the “best VR game” or “best Half-Life” game but standing tall among the greatest games ever made. Even now, five years on, Alyx enjoys an impressive position on Steam250’s best-rated games list. However, Valve’s accomplishments extend far beyond a single remarkable VR game. The Index VR headset, once the go-to choice for hardcore PC VR enthusiasts, alongside Steam’s extensive VR support, have been the backbone of the industry in recent years.

But while Valve’s impact on VR is undeniable, their public discourse on their VR plans has been notably silent. There’s little official news about major developments or announcements for new games or hardware.

So what’s Valve’s next move in the VR domain? Here’s what we’ve uncovered so far.

Firstly, it’s essential to note that SteamVR is still the definitive PC VR platform, thanks to Valve’s deliberate yet impactful updates over the years. A significant addition occurred at the tail end of 2023 when Valve suddenly introduced the Steam Link app for Quest headsets, facilitating a seamless wireless gameplay experience for SteamVR games.

Moreover, it appears Valve isn’t finished with Steam Link just yet. Passionate dataminers hint at potential launches for Steam Link across new headsets, like the Vive Focus from HTC and Pico headsets by Bytedance.

Furthermore, it looks like Valve is eager to enhance the wireless PC VR experience for standalone headsets. Dataminers have discovered references suggesting the development of a “SteamVR Link Dongle”—likely a USB device designed to establish a direct wireless link between the user’s PC and headset.

Currently, using Steam Link requires connecting the headset to a router, which then links up with your PC. This setup works fine as long as both devices are relatively close. However, some users facing suboptimal wireless setups or those seeking maximum bandwidth might encounter quality issues such as stuttering or pixelation. If the SteamVR Link Dongle functions as anticipated, it will establish a direct connection between your PC and headset, bypassing the router. This step would not only eliminate an additional link in the chain but also enable Valve to optimize the connection for an unparalleled PC VR experience, utilizing the latest Wi-Fi 6E technology.

What remains unclear is whether this dongle will extend support to third-party headsets like the Quest or if it’s designed specifically for Valve’s long-speculated ‘Deckard’ headset.

Speaking of new hardware, let’s delve into Valve’s next possible moves on the headset front. Following the launch of the Index in 2019, buzz around a new Valve headset started with patents filed in 2020. These documents hinted at various exciting concepts, including a standalone headset and numerous ergonomic innovations.

Fast-forward five years, and while no new headset announcement has been made, a series of leaks and data-mined hints suggest Valve might indeed be working on one, albeit on their unique “Valve Time™.” Not long ago, updates to SteamVR files revealed a 3D model of never-before-seen VR controllers, hinting that Valve is indeed moving forward with a new VR headset, tentatively called ‘Deckard.’

Rumor has it the Deckard headset (potentially to be branded as ‘Index 2’) is intended as a standalone device that streams content from a PC hosting SteamVR, a functionality similar to what Quest headset users experience through Steam Link. The design of the leaked controllers, which feature a layout familiar to traditional game controllers, suggests that the headset might cater to both VR games and playing flatscreen VR content on a large virtual display.

This strategic design could streamline gameplay, allowing users to switch effortlessly between VR and traditional gaming experiences without needing to swap hardware. In a recent rumor, a reliable leaker predicted a 2025 launch for the Deckard headset with a possible price tag of $1,200.

While we can’t confirm these claims, recent datamining points to ongoing progress with references to “Deckard EV2” surfacing in SteamVR’s latest update. EV2 suggests a second-round validation device—a meaningful indicator that the headset is inching closer to production. While an EV3 or more might follow, it’s worth noting that Valve’s recent Steam Deck OLED hit production shortly after reaching EV2. Datamining veteran Brad Lynch claims he’s confident Valve will reveal this new headset soon.

Turning our gaze toward new VR games, let’s not forget the impact of Half-Life: Alyx, a masterpiece since its launch in early 2020. Even as the game stands out as an exceptional VR achievement, it remains uncertain whether Valve is satisfied with its commercial success relative to the investment required for its development.

Yet, the possibility of another VR project in the pipeline is ever-intriguing. A familiar leaker claiming the Deckard headset would debut in 2025 also suggests that Valve has games—or demos—that are primed and ready for release, crafted especially for Deckard. This aligns with earlier findings from Tyler McVicker, a seasoned Valve dataminer with a knack for digging up compelling insights.

Just under a year ago, McVicker unearthed evidence suggesting Valve was developing another VR game alongside the Deckard headset. While the studio has an array of iconic intellectual properties to draw from, McVicker speculates the next VR title will delve back into the Half-Life universe—potentially even two entries. The projected game could be an asymmetric co-op experience, blending one part for a traditional flatscreen PC player and another for a VR player.

This creative setup could fuse Valve’s two major devices—the Steam Deck and the rumored Deckard—into a single, interlinked experience. Valve remains tight-lipped about any forthcoming headsets or VR titles, declining to confirm or refute the rumors swirling around a new headset or game in development. In response to a request for comment on future VR plans, a Valve spokesperson simply expressed their enjoyment in seeing community creativity flourish through the Half-Life: Alyx Workshop.

Now, to fully appreciate Valve’s operations, it’s essential to understand their distinctive company culture. Valve operates on a ‘flat’ management model, virtually unheard of among companies of their caliber. This atypical structure allows employees significant autonomy in choosing projects, shaping what the company ultimately creates.

The employee-driven approach, outlined in the Valve Employee Handbook, means that projects flourish—or falter—based on the passion they ignite among the team. Those driving breakthrough ventures are usually individuals deeply invested in what they’re building. Triple-A talent and this innovative autonomy create an environment where Valve consistently outperforms expectations despite having fewer resources compared to larger industry competitors.

Although new hardware or game releases don’t occur annually, Valve’s continuous developments within SteamVR—paired with tantalizing glimpses of behind-the-scenes R&D—indicate a persisting belief among its diligent workforce that VR remains a worthy endeavor.