Web3 Gaming Gears Up for 2026 as Axie Infinity and Illuvium Embrace Higher Risk
Web3 Gaming Enters a Riskier Era in 2026 as Axie Infinity, Illuvium, and Industry Leaders Rethink Strategy
By HOKANEWS Editorial Team
After years of experimentation, boom-and-bust cycles, and shifting player expectations, the Web3 gaming sector is preparing for a decisive new chapter in 2026. Leading projects are signaling a willingness to take greater creative and economic risks, betting that innovation rather than caution will define the next phase of blockchain-based games.
Insights from developers and industry leaders suggest that Web3 gaming is moving beyond its early play-to-earn foundations toward more complex, skill-driven, and high-stakes experiences. Among the most closely watched developments are plans by Axie Infinity to embrace bolder design choices, a new competitive “risk-to-earn” mode under development by Illuvium, and broader reflections from Animoca Brands co-founder Yat Siu on politics, regulation, and the future of Web3 under a changing global landscape.
The discussion, highlighted in coverage by Cointelegraph Magazine and confirmed by the Cointelegraph X account, reflects a growing consensus that Web3 gaming must evolve rapidly to survive and compete with traditional gaming ecosystems.
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| Source: XPost |
Axie Infinity Signals a More Aggressive Strategy
Once the flagship of the play-to-earn movement, Axie Infinity became a global phenomenon during the 2021 bull market. However, like much of the Web3 gaming sector, it struggled to maintain momentum as token incentives weakened and player engagement declined.
Heading into 2026, the Axie Infinity team is signaling a strategic shift. Developers have acknowledged that overly conservative design decisions limited innovation and contributed to stagnation. In response, the project plans to take more creative and economic risks, focusing on gameplay depth, competitive balance, and long-term player retention rather than short-term token rewards.
Executives behind Axie Infinity argue that the next generation of Web3 gamers expects experiences comparable to traditional games, with meaningful progression, real challenge, and the possibility of loss. This represents a departure from early models that emphasized guaranteed rewards and low barriers to entry.
Industry analysts view this shift as a necessary evolution. Without higher stakes and deeper mechanics, Web3 games risk being perceived as financial products rather than entertainment.
Illuvium Explores “Risk-to-Earn” With Deathmatch Mode
Illuvium is also pushing boundaries with its plans for a new risk-to-earn deathmatch mode, an approach that explicitly embraces loss as part of the gameplay loop. Unlike traditional play-to-earn systems, where rewards are often distributed regardless of performance, risk-to-earn models require players to stake assets with the possibility of losing them.
Developers believe this approach creates stronger emotional engagement, competitive integrity, and a healthier in-game economy. By tying rewards to skill and strategy rather than participation alone, Illuvium aims to attract players who value challenge and mastery.
The proposed deathmatch mode would allow players to pit their characters and assets against one another in high-stakes battles. Winners earn meaningful rewards, while losers accept real consequences. Supporters argue that this mirrors the appeal of esports and competitive gaming, where risk and reward are inseparable.
Critics, however, warn that such systems could alienate casual players. Illuvium’s team has indicated it plans to balance accessibility with optional high-risk modes, allowing players to choose their level of exposure.
From Play-to-Earn to Play-and-Compete
The shift toward risk-based mechanics reflects a broader industry rethinking of play-to-earn itself. Early Web3 games often prioritized financial incentives over gameplay quality, leading to unsustainable economies and mercenary player behavior.
In 2026, many developers are reframing the model as play-and-compete or play-and-own. Under this approach, blockchain elements enhance ownership and interoperability, but the core experience remains grounded in fun, challenge, and community.
Market researchers note that successful Web3 games increasingly resemble traditional games first, with tokenomics playing a supporting role rather than the central attraction. This trend aligns with player feedback and lessons learned from past cycles.
Yat Siu on Regulation, Politics, and Trump
Beyond game design, industry leaders are also grappling with macro forces shaping the future of Web3. Yat Siu, a prominent advocate for digital property rights, has spoken openly about the political and regulatory environment facing blockchain innovation.
Siu has suggested that political shifts, including the growing influence of Donald Trump, could significantly affect Web3 adoption in the United States. He argues that policies favoring deregulation, entrepreneurship, and digital ownership could create a more favorable environment for blockchain gaming and virtual economies.
At the same time, Siu cautions that regulatory clarity is more important than ideology. Developers and investors, he says, need predictable rules to build sustainable platforms. Uncertainty, rather than regulation itself, remains the biggest obstacle to growth.
His comments reflect a pragmatic view shared by many in the industry: Web3 gaming’s success will depend as much on policy frameworks as on technical innovation.
Confirmation and Industry Context
These insights were highlighted in reporting by Cointelegraph Magazine and have been confirmed by the Cointelegraph X account. HOKANEWS has cited this confirmation as part of its broader analysis of Web3 gaming trends, consistent with standard media practices.
While Cointelegraph is a leading source of crypto and blockchain news, the developments discussed align with independent observations across the gaming and technology sectors.
The Competitive Pressure From Traditional Gaming
Another factor driving risk-taking in Web3 gaming is competition from traditional game studios. Major publishers are investing heavily in live-service games, esports, and user-generated content platforms, raising player expectations across the board.
To compete, Web3 games must offer more than token rewards. They need compelling narratives, polished mechanics, and social experiences that rival established franchises. Risk-based gameplay is one way developers hope to differentiate themselves while appealing to core gamers.
Looking Ahead to 2026
As 2026 approaches, Web3 gaming stands at a crossroads. Projects that remain cautious may struggle to capture attention in an increasingly crowded market. Those willing to experiment, even at the cost of short-term volatility, could define the next generation of blockchain games.
Axie Infinity’s renewed appetite for risk, Illuvium’s embrace of high-stakes competition, and Yat Siu’s reflections on policy and politics all point to an industry searching for maturity rather than hype.
For players, this evolution promises richer, more challenging experiences. For developers, it represents both opportunity and responsibility. And for the broader crypto ecosystem, it signals that Web3 gaming is no longer content to be a niche experiment.
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Writer @Ethan
Ethan Collins is a passionate crypto journalist and blockchain enthusiast, always on the hunt for the latest trends shaking up the digital finance world. With a knack for turning complex blockchain developments into engaging, easy-to-understand stories, he keeps readers ahead of the curve in the fast-paced crypto universe. Whether it’s Bitcoin, Ethereum, or emerging altcoins, Ethan dives deep into the markets to uncover insights, rumors, and opportunities that matter to crypto fans everywhere.
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