If you frequently play DOTA 2, then you notice teammates who either never played the game or can almost play professionally. To balance the skill level and provide the fairest competition, Valve plans to introduce a ranked matchmaking system for players who desire competitive match-ups.
The next major update introduces a feature that calculates matchmaking rating (MMR). To calculate your MMR, the rating unlocks after 150 games. In order to enter the ranked matches, all players in a party must unlock the mode. The ranked mode calculates your MMR after 10 initial games. To avoid getting discouraged by opponent MMRs or feel ashamed of your own, a player's MMR stays visible to friends only.
The MMR updates after each match based on your performance. While the MMR calculations account for your individual performance, Wins and Losses primarily drive changes your rating. And the rating doesn't apply universally across all playlists – your MMR changes for different queues. If you only play ranked matchmaking with a party, then your MMR remains unchanged when queuing in solo matchmaking.
Valve's end goal aims for a match-up that guarantees a 50% chance win rate. The matchmaking also considers other criteria such as party size, language preference and ranges in skill. Although Wins and Losses drive your MMR, Valve acknowledges that the amount of wins doesn't indicate true player skill.
To further explain the criteria for matchmaking and the data taken into consideration, you can read the full explanation on the DOTA 2 blog. While you wait for the ranked matchmaking update, Valve celebrates the holidays with the Christmas Frostivus event.