Enter Source 2, an engine Valve has confirmed in 2012 and has--in typical Valve fashion--spoken nothing of since. A new Reddit AMA with Valve's Gabe Newell gives us at least some insight into what's happening.
When asked: "What improvements will we see out of the Source 2 engine?" Newell responded: "The biggest improvements will be in increasing productivity of content creation. That focus is driven by the importance we see UGC having going forward. A professional developer at Valve will put up with a lot of pain that won't work if users themselves have to create content."
Given how popular Steam Workshop and Trading Cards have been, it's unsurprising that Valve would want to focus on user-generated content for its upcoming engine. One more tidbit revealed in the Q&A: "Alex Vlachos is working on... getting Source 2 working well with VR," another unsurprising development, given Valve's interest in VR.