Valve games have always had a massive modding community behind them, and today they can claim a massive victory. An inquiry into obtaining a Source Developer Asset Repository license resulted in a big reveal: future standalone mods of Valve games will have fees for acquiring Havok physics licenses waived. This applies to various Valve game mods, including those for Team Fortress 2.
Normally a large monetary investment, obtaining a license such as Havok is often prohibitively expensive for indie developers and modders. The admin of the TF2 Cut Content Wiki posted an exchange confirming the agreement earlier today on their Twitter account. Upon inquiring about the $2,500 cost to purchase just the repository license, Valve's European legal department confirmed that they had reached an agreement with Microsoft to waive the fees for future Valve mods using the Havok engine. Most mods did not require a license in the first place, but those that wanted a standalone page on the Steam store did. It's unclear at this time whether this applied to titles such as Black Mesa, S&box, or G String, and whether the standalone games derived from Half-Life 2 needed to purchase a license, however ones in the future will definitely not need to.
Valve did not clarify when the two companies came to an agreement. They did remark, however, that the intent for mods was for them to be noncommercial fan projects and that the Team Fortress 2 team did not currently have the bandwidth for working with mod teams. Whether this lack of bandwidth applied to other Valve IPs was not clear in the company's response. While this means that paid mods are not likely in the cards in the near future, small development teams and studios can proceed with Valve game mods and use the Havok Physics engine without shelling out large amounts of money for a license.
Valve's Source Engine, a building block for many of their games, used part of the Havok engine. Source Engine 2.0, however, did not use Havok and thus is exempt from the agreement. This means that games utilizing the earlier engine (such as Portal and its sequel, Portal 2, Team Fortress 2, Half-Life 2, DOTA 2, Counter Strike: Source, Left 4 Dead, and its sequel Left 4 Dead 2) presumably fall under the new agreement. Given the sheet number of mods for Valve's games, the news bodes well for indie developers and small studios who want to create large projects like total conversion mods.
Havok, developed in 2000 by an Irish studio of the same name, has been used in hundreds of games since its inception. Microsoft acquired Havok in 2015. The engine can also be found in Autodesk 3ds Max, Autodesk Maya, and others. Havok Physics engine creates a more realistic world thanks to the use of ragdolls and optimized collision detection, and has found use spanning dozens of disparate genres.
Team Fortress 2 (2007) is a classic team-based shooter. It is available for free on the Steam Store.