Eve Online set records for most players in an online battle. Eve Online is a game set in deep space where player control starships and seek to control territories by fair means or foul and in turn control resources that can be translated into in game goods and currency.
The battle was between two alliances, The CFC and the TEST Alliance fielding a combined 4070 players in a single game. In most cases this would result in the servers hosting this game to fail under the load of this many simultaneous logins but the game developer CCP Games has developed a technique to handle this kind of demand called time dilation where the gameplay is slowed to accommodate this kind of demand.
During this battle the game was slowed to 10% of normal gameplay speed allowing the servers to keep up with the load and ensure that no players gained unfair advantage if they had a quicker or shorter connection to the games servers.
This slowed down gameplay did not mean that the game was less enjoyable for the players at this level as in game communications allowed players to work together on strategies and take in the scale of the battle.
The CFC was successful in defeating the TEST Alliance and even though countless hours were spent in building up each respective alliance congratulated each other in a good battle and went on with their respective games.
If you want to take a look at Eve, I am happy to invite you into the game with a free 21 day trial (normal trials are 14 days).