Half-Life 2: Episode Two ships with its own set of authoring tools, but if you want to make your own mod, you need the Source SDK. The Source SDK is a program that organizes all the authoring tools for specific mods and engine builds and has the ability to automatically create a mod based on the code from Half-Life 2: Episode Two. If you want to create your own mod, you will need to grab the Source SDK.
Installing the Source SDK is just as easy as any regular game. The best part is its price: free! The steps for installing the Source SDK are as follows:
In the top-left corner of the games library, select the dropdown that says All Games and select Tools.
Find the Source SDK in the list of Tools.
Right-click on Source SDK and select Install game, or just double-click to begin the download process.
You can monitor the download progress within the Downloads tab in the LIBRARY. The Source SDK will begin to install automatically once the download is complete.
When you first launch the Source SDK, it will need a minute or so to copy files and complete the install, but once that is complete, you're ready to go! You will notice that the Source SDK contains a variety of tools, documents, and links. At the very bottom are two fields labeled Engine Version and Current Game. Engine Version is used to select which version of the Source engine you would like to develop for.
The later engine versions have more features and graphics upgrades compared to the earlier versions. There is also the Source Engine MP option, which lets you create maps for Valve's multiplayer games such as Counter-Strike: Source and Team Fortress 2.
In the APPLICATIONS list, you will see Hammer Editor, Model Viewer, Face Poser, and itemtest. Hey, doesn't this look like the set of authoring tools we had for HL2: EP2? It is, with the exception of itemtest that allows you to look into details about specific games items such as the items available in Team Fortress 2.
In the DOCUMENTATION list, you will see Release Notes and SDK Reference Docs. The Release Notes option will link you to the Valve Developer Community website that describes the changes made to the current version of the Source SDK. SDK Reference Docs will link you to the Valve Developer Community website's collection of notes about every aspect of the Source SDK.
In the UTILITIES list, you will see Create a Mod, Refresh SDK Content, Reset Game Configurations, and Edit Game Configurations. Create a Mod will open a wizard that allows you to create your own modification, or mod, for a certain Source game. Refresh SDK Content will refresh all the game content in the event that the Source SDK is not functioning properly. Reset Game Configurations will return all games to their default configurations. Edit Game Configurations will allow you to modify the path of any game you want.
In the LINKS list, you will see Valve Developer Community and Softimage|XSI Mod Tool. Valve Developer Community will link you to the main page of Valve Developer Community. Softimage|XSI Mod Tool will link you to an Autodesk website where you can download a free version of character modeling and animation software that is compatible with the Source engine.