Dota has more cosmetics than any other game you could possibly find. Also, Valve makes money like 10 different ways from steam alone and they probably were, like Cassador says. It’s like they say, you have to spend money to make money.
It’s not far-fetched, either. Operating costs for digital ventures operate on economies of scale, and generally scale very favorably. For a free-to-play game, therefore, it is more important to have a stable, large base of players. It absolutely would make sense for them to lose money to gain that, you could almost look at it like buying revenue (except it’s not as straightforward or guaranteed as a purchase, so you can’t)

