Half-Life 2's Real Battle

But then news leaked out that hackers had somehow installed a piece of malicious software onto Newell's work computer and had taken a copy of the in-development programming for Half-Life 2. Weeks later, dealers at underground Web sites purported to sell unfinished but playable versions of the game.

Some of the company's fans expressed outrage at the break-in and set out to hunt down the thieves, and the FBI eventually announced that it had made arrests in the case.

The company's fans "completely rallied," Newell said. "They tracked down the culprits, gave us logs of them talking about the crime, and sent us their identities and their [Internet] addresses. And after the arrests, they sent us cookies."

Nevertheless, Valve announced, and missed, new release dates and kept pushing the game's release back as designers kept working to perfect their creation.

At one point, Valve and publisher Vivendi Universal Games Inc., which distributes the game to retail stores, even made conflicting comments about when the game would hit the market.

Their partnership has been the subject of multiple legal spats as the pair fought over the game's lucrative rights. To date, their disagreements have generated some 200 legal filings -- motions, claims and counterclaims. Valve alleges that Sierra Entertainment Inc., a division of Vivendi Universal Games, overstepped its bounds by selling Half-Life to Internet cafes and that the publisher was thereby infringing on its copyrights in regard to Half-Life.

"Sierra's activities are outside the scope of Sierra's limited license . . . and therefore constitute copyright infringement in violation of the Copyright Act of 1976," the complaint reads.

Vivendi Universal Games, meanwhile, has filed its own complaints against Valve, claiming that the developer threatened to slow down production of the Half-Life sequel if the publisher did not relinquish some of its rights under the original contract for the game. Vivendi has also sought to stop Valve from distributing the game online before it is sold in stores.

Neither side would comment on the lawsuits -- citing policies against talking about pending litigation -- though Newell offered that the suit and the hacker theft have been "very painful" for him.

With such hullabaloo surrounding the game, Valve has put in place new security policies for Half-Life 2. For example, magazine reviewers who wanted to take an early look at the game have had to fly out to Valve's Bellevue, Wash., headquarters to play it. ("It's spectacular," said Andy McNamara, editor-in-chief of Game Informer magazine, who made the trek.)

Despite such heavy security precautions, somewhere along the line, a free finished version of the game was leaked again.