Later today, Valve will also announce Arkane Studios, an independent French developer that created the critically-acclaimed role-playing game "Arx Fatalis," has licensed the engine for a forthcoming title. The game is already in development, but does not have an announced release date.

February 3, 2004 – Valve, developer of best selling games and leading edge technologies, today announced a Source Engine licensing partnership with Arkane Studios, creators of Arx Fatalis. Already in development, Arkane's Source-based project is targeted for the PC.

Valve's Source Engine Technology, the same used to create Half-Life 2, gives developers the ability to create expressive digital actors and physically simulated worlds. It also offers advanced rendering capabilities and the industry's most convincing artificial intelligence.

"It is a very comfortable feeling for a developer to be able to concentrate on the content of its game and have access to a set of stunning features and capabilities," said Raphael Colantonio, CEO of Arkane Studios. "Source is solid, performant [sic] and extremely complete in terms of the amount of innovative features. But more important, it is also open and flexible enough to allow us to build creatively upon, without having to bare the technological risks. Working with Valve is not only a fan's dream, but also an excellent opportunity to be one of the fortunate developers in the world to benefit from the Source engine's most impressive features."

Arkane Studios joins Troika Games as the second announced Source licensee. Source is designed for the creation of games and MODs from all genres, and contains a host of proprietary tools for level editing, character direction and more.

"The Half-Life technology was pushed well beyond our expectations by the MOD development community," said Gabe Newell, Valve's managing director. "This provided invaluable knowledge for producing a cutting edge, flexible, and easy to use set of tools and engine technology."