Valve's Source SDK is now free. This is followed by the news that Team Fortress 2 (one of Valve's most popular games and incidentally one of the most prominent non-photorealistically rendered gaming titles around today) is also becoming freely available (see here).
The engine has been around for a while (which does prompt the question on whether Valve is working on a replacement) but this is still fantastic news, remember this is the engine behind iconic games like Half Life 2. More information on the Source website here, which incidentally has a section for educators teaching game design (such as myself).
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