The first game is certainly not what fans hoped for; it's a game called Artifact, a Dota 2-themed card game that was announced last year. The good news is that Newell did clearly state that isn’t the only game Valve has plans for. Newell said that Artifact was "the first of several games" that Valve is working on. Newell did talk a bit about why Valve walked away from games.
He stated much of the reason was a concern that PCs were becoming more of a closed system. Valve now feels adept in both hardware and software design, thanks in part to investments in Vive. This comfort will impact the way Valve works on games moving forward apparently.
"The positive thing about the
Newell also said, "We've always been a little bit jealous of companies like Nintendo. [Miyamoto] can introduce new capabilities like motion input because he controls both of those things. And he can make the hardware look as good as possible because he's designing the software at the same time that's really going to take advantage of it."
Newell did participate in a Reddit AMA in January where he said that Valve is working on a new single-player game. He didn’t say it was Half-Life 3, but the hearts of Freeman fans everywhere are full of hope again. Newell recently squashed rumors that Microsoft was going to purchase Valve.