How it unfolded
Valve invited 16 teams to Gamescom in Cologne to promote a still closed-beta Dota 2, putting up a $1.6 million total prize pool with a $1 million grand prize. At a time when tournament winners typically took home tens of thousands of dollars, the announcement alone was an entirely different order of magnitude and set the industry buzzing. The final matched Ukraine's Natus Vincere against China's EHOME. Na'Vi, built around captain Puppey's drafting and Dendi's aggressive mid-lane play, unsettled its opponent's lane setups and won the best-of-five 3-1. Dendi's play on Pudge became the signature image of the tournament. The documentary Free to Play, which followed the run-up to the event, was later released for free and served both as promotional material for Dota 2 and as a foundational text for early esports storytelling.
Why it still matters
A single tournament completely reset the ceiling for esports prize money. The $1 million grand prize made professional gaming a career worth seriously considering rather than an extension of a hobby, and the crowdfunding model Valve introduced the following year kept The International the largest prize pool in esports for more than a decade. Combined with Twitch's launch that same year, audience size exploded in parallel.