So, basically:

The two parties came to the conclusion that they cannot work together and that they will, in practice, become direct competitors.

Yet, they would support each other to the fullest.

This statement seems a bit contradictory, but at least for now Valve seems to act accordingly by directly promoting Drodo Studio’s Auto Chess mobile game beta in their blog post.

It will be curious to see the implications of this relationship in the future:

Does it mean Valve will not develop a mobile app or at least that they will stay out of the Chinese market with Dota Underlords to avoid directly competing with the Auto Chess mobile app?

It could be a way for the two games not to clash directly, but it seems unlikely for Valve to pass up such a huge business opportunity. It is rumored that 70% of Dota 2’s revenue comes from China. This is remarkable, bearing in mind that the PC gaming market in China is smaller than the mobile gaming market. With Auto Chess fitting a mobile-game format very well, it’s fairly likely that the market-leader Auto-Chess-like mobile game will be worth billions.

This makes it more likely that the two companies will support each other in spirit but directly compete with each other in practice. Time will tell.

Another interesting statement that might not get noticed next to the major announcement is that Drodo will “…attempt to design new modes and adaptations in our standalone game.” So, we will get other modes of the game in the Auto Chess app, which speaks that maybe the two developers will try to differentiate the two standalone games from each other as much as possible.