During E3 this week, Gamasutra tracked down Valve marketing VP Doug Lombardi to confirm and clarify those reports: Booth himself remains in Irvine, California; several team members moved to Bellevue to work at Valve proper; and although the physical Valve South office is no longer in operation, the remaining team members are currently working with Booth on another unnamed project.
"It's not like we shut it down. We bought the studio and we're still working with, I think, every single person from the studio," Lombardi explained.
The exec referred back to the situation leading up to the acquisition to better frame the events:
"Turtle Rock was just Mike at the beginning, and after he refused to move to Seattle, we said [to] start hiring people and build prototypes for what became Left 4 Dead, which was called Terror at the time," Lombardi recalled. "Finally, we said, you guys are a bunch of contractors working under Turtle Rock Studios; why don't we just call you Valve South?"
But after the game was complete, the traditional Valve practice of team members moving around to different projects was more difficult in the context of a remote location.
After several members of the Valve South team -- which Lombardi described as only ever numbering "nine or 11 in total" -- moved up to Bellevue, the remaining staff were not enough to justify a fully-fledged studio.