When contacted in regards to the team, Doug Lombardi, vice president of marketing at Valve, shared the following with us.
I can confirm that the Tag dev team are employed at Valve. But that's about all I can say right now.
The possibility of an acquisition arose over the weekend, as Shack community member Masem was discussing Portal 2 details from the latest issue of Game Informer. The article made reference to, in Masem's words, "using special paint that gives unique physical properties to surfaces (eg rocket jumping, speed bursts, etc)".
On the DigiPen site, Tag: The Power of Paint is described as such:
Tag delivers an innovative approach to multiple genres-platformer, puzzle, and first-person shooter-by allowing the player to manipulate the physical attributes of the game's environment using different colors of paint.
Hiring a team from the educational institution for their gameplay concepts isn't outside of the realm of possibility for Valve Software. In fact, it was the exact same thing that happened to the developers of Narbacular Drop, the DigiPen game created by Kim Swift and her team, which would eventually become what we now know as Portal.
Prior to Valve's direct confirmation, Masem did some investigating of his own and found "two of the four main students on the project and they claim Valve employment." Excellent work, Masem!