Valve and Vivendi Universal Games (VU Games) today announced the settlement of a pending federal court lawsuit filed by Valve in August 2002. The parties have resolved their differences, and the settlement provides for the dismissal of all claims and counterclaims. Under the settlement agreement, VU Games will cease distribution of retail packaged versions of Valve’s games, including Half-Life, Half-Life 2, Counter-Strike, Counter-Strike: Condition Zero and Counter-Strike: Source, effective August 31, 2005.

Additionally, VU Games has notified distributors and cyber cafes that were licensed by VU Games that only Valve is authorized to distribute Valve games to cyber cafés and grant cyber café licenses. Cyber café operators that were licensed by VU Games have also been notified that any license agreement from Sierra Entertainment, Vivendi Universal Games or any of their affiliates or distributors that may have granted rights to use Valve games in cyber cafés, whether written or oral, is terminated.