Eurogamer had a chance to sit down with Valve designer Gabe Newell, Doug Lombardi, and a bunch of folks from the Valve design house to talk about the process of creating Half-Life 2: Episode One . They discuss the rationale behind going episodic, the development process, why we're unlikely to see a Half-Life movie anytime soon, and the many improvements to the Source engine. From the article: "I think we're better at it, in terms of learning how to anticipate. It's like after you've watched a couple of hundred playtests, you start to develop a much better sense of what are successful and unsuccessful design strategies. And so the thing we're going to do with Episode One is to extend that out to all of the people."

1up is running a piece looking at the ESRB, and its role in politics. They assert the organization may be gaming's last defense against politicians seeking to censor games to increase their own political capital. The article discusses the Hays Code governing movies, and the limits on speech the comic book industry placed on itself as the result of similar pressures. From the article: "Ultimately, the best way to prevent the demise of gaming is to make use of the democratic process. Despite what the Internet would like to believe, mere emails and forum posts don't have much clout. Rather, posted letters to representatives (written on actual paper) are the best way to let politicians know your opinion -- the beliefs that they've been elected to represent."

Gamasutra addresses the rumour floating around saying that every PlayStation 3 will have PS2 hardware included. This is apparently a fast and loose solution to Backwards Compatibility. Sony says 'that news ... is just speculation'. From the article: "According to the report, the article indicates that Sony is looking to this as a temporary solution, and plans to remove the chip from future hardware PlayStation 3 models, once it is able to include a functional PlayStation 2 emulator in its place. Such a redesign would, if true, presumably drive down the console's lofty price."

DoctorBit writes "According to an article in EETimes, Intel's processor sales dropped 52 percent this April as compared with April one year ago. Unit sales dropped 21 percent and prices dropped 40 percent. The article concludes with an industry analyst's assertion that 'Intel has obviously given up on making any money on their current generation of processors and has started a price war with AMD.' The San Jose Mercury News is reporting that Intel has just put several of its money-losing communications businesses up for sale and notes that 'it remains to be seen what Intel will do with its other money-losing businesses, Itanium microprocessors and flash memory chips.' The article quotes an industry analyst saying 'If you look at Intel today, it's hard to find a trace of the technology or the people that they spent more than $10 billion on.' Ouch."

News.com reports that Second Life is looking down the barrel of some major scaling problems as the virtual world's popularity soars. While Linden Labs itself seems confident in the scalabilty of their virtuality, outsiders aren't so sure. From the article: "'My understanding of (Linden Lab's) back-end requirements are that they're absurd and unsustainable,' said Daniel James, CEO of Three Rings, publisher of the online game Puzzle Pirates. 'They have (about) as many peak simultaneous players as we do, and we're doing it on four CPUs.'"

Mac Observer is running a piece by John Martellaro looking at why Apple isn't into gaming. It's just one man's opinion, but he makes some interesting arguments. From the article: "The reality is that Apple has struggled for a long time to avoid the perception that Macs are toys, and so their principle emphasis is on science, small business, education, and the creative arts. All very grownup stuff. If a market doesn't appear on Apple's main page tab, you can be sure it's a secondary market."

DigitalDame2 writes "If people from the 1920s suddenly landed in the here and now, they'd probably find modern technology a bit weird. Take digital cameras for instance. Nobody would have predicted that most people would now take pictures by holding the camera out in front of them and look at the preview screen to frame a shot. Then there's the iPod phenomenon. Is anyone's music collection that interesting? How many people are being deafened by these things, and what kind of a public health disaster is this? Take a stroll through our modern world with John C. Dvorak's hilarious take."

A little late, but just as impressive as promised, the Spring Update to Xbox Live is now available for download. The most anticipated feature is the addition of 'background' downloading and download queueing. The update also reorganizes where several oddly placed options were located, and generally smooths the UI experience.

An anonymous reader writes "With the PlayStation 3's launch still a ways off, Toshiba and Sony are turning to the PC as the next battleground for the DVD format. News.com reports that some manufacturers are, at least for now, planning to offer both options on upcoming desktop and laptop PCs. Only a handful of films and software are to be available for the formats this year." From the article: "PCs equipped with HD DVD or Blu-ray will cost several hundred dollars more than comparably equipped models with DVD drives--a factor that should keep sales relatively low this year as consumers wait for applications and video titles that can take advantage of the higher capacity."

Devil's BSD writes "At a Windows Vista reviewers conference, Microsoft platform president Jim Allchin told a rather amusing story about Steve Ballmer. Apparently, a friend asked him to rid his computer of the spyware and malware that had accumulated over the years. As the story goes, neither Ballmer nor Microsoft's top engineers could fix the infested computer. The article goes on to discuss and compare Microsoft's new security offering, Windows Live OneCare."

abb_road writes "BusinessWeek looks at the need for better electronic privacy safeguards in light of NSA call monitoring, and more recent administration pushes for ISP data-retention. As the article discusses, though safeguards are already in place, they're easily bypassed, based on older communication norms and don't take into account any 'war-time necessity' arguments." From the article: "There's a crying need for better privacy safeguards that reflect today's world -- and mirror a consensus among America's gadget-happy, cell-phone addicts whose daily chats and text messages are grist for Echelon's computers."

Accommodate Students writes "In a move that is sure to cause even more discussion of Google's intentions to go head-to-head with Microsoft in the Office Suite arena, they have launched a spreadsheet. AP is reporting this as 'Google further invades its rival's territory.' You can share spreadsheets with other users and can chat while you're editing -- multiplayer spreadsheets! It can read both CSV and XLS formats." More from the article: "Google is targeting Office, which generated $2.95 billion in sales and $2.09 billion in profit in Microsoft's third quarter ended March 31. Microsoft plans a new release this year and is trying to get Office into more consumers' hands at a cheaper price while persuading businesses to buy higher-priced versions."

Andy Updegrove writes "In this third interview in a continuing series, I interview Sun's Erwin Tenhumberg, in order to compare StarOffice 2.0 with the other leading software productivity suites that support ODF (previous interviews have focused on KOffice and OpenOffice). As in the previous interviews, Tenhumberg answers questions intended to showcase the strong (and the weak) points of his product in comparison to its competitors, and in order to showcase the rich and varied ecosystem of products that is growing up to support ODF. He also answers a second set of questions tailored to bring out what's unique about Sun's development efforts, and how StarOffice relates to OpenOffice. This interview is particularly informative on accessibility issues."

Lasting News has a story about a UK parliamentary report on DRM issues. According to BBC News, the All Party Parliamentary Internet Group has expressed its concerns about the over protection caused by DRM. This report is insisting on the need for information. Both consumers and DRM makers should informed of UK copyrights' legal context. According to this report, consumers should be aware about how they are able (or not) to switch from one gadget to another media player. The report also raises fresh concerns about copy protection software implemented by some DRM makers that could be sued under current UK laws.

An anonymous reader writes "HardOCP has a scoop posted on ATI and their new physics solutions. ATI has teamed up with Havok as expected and shows off their 'Boundless Gaming' on an Intel Conroe box with three X1900s inside. [H] also has a full ATI PDF posted on the technology as well. Don't throw away those old ATI video cards just yet."