Valve signed a deal for Counter-Strike 2 in 2003 because they were 'running on fumes', and Gabe Newell was so happy he made a celebratory knife with his own hands

pcgamer.com:

As part of Half-Life 2's 20th anniversary Valve has released a new documentary on the making of the game, a period that was arguably also the making of the company. A significant thread in the story is not just the difficult development of the game itself, but Valve's major legal battle with Vivendi over these years.

Vivendi, through subsidiary Sierra Entertainment, had published the original Half-Life and owned the IP, but had overstepped its bounds by selling Counter-Strike (a Half-Life mod) in Asia without Valve's knowledge. To cut a long story short, a huge legal fight kicks off, with Valve looking to regain control of Half-Life, and the much larger Vivendi simply looking to bully Valve out of the IP and employing seriously nasty tactics (like making Gabe Newell's then-wife part of the lawsuit).

This thing dragged on for years, and it got existential for Valve, with Newell leveraging himself to near-bankruptcy in order to keep the company afloat. Valve COO Scott Lynch, who ironically had managed Sierra in the past, was desperately trying to ink deals that would keep the studio going and let it keep fighting. And so it happened that Counter-Strike 2, a game that would finally be released in 2023, became almost a makeweight in a Half-Life 2 deal.

«I started working on a deal with a big publisher that was for Counter-Strike 2,» says Lynch. «So we're right there, ready to sign. We're really kinda running on fumes at that point. And then get a phone call and they're like 'yeah we changed our mind, we're not doing the deal.' I remember one conversation with Gabe, he was like 'so how we fucked are we?' And I was like 'well, we're kind of screwed.'

»We can probably reformat everything we're doing but it means we lay off people, and we still had the huge uncertainty of what's going to happen in the lawsuit."

With Vivendi's lawyers circling, and Half-Life 2 still some way from shipping, Valve needed an influx of cash to keep the lights on. «I immediately started chasing