He also tries to comfort Gi-hun about 's death, reminding him that Il-nam is someone he only met recently during the games, which might be something Sang-woo is also telling himself about Ali.
Director Hwang that it was his favorite childhood game, so yes, it does seem to be real.
This ultimately causes him to choose Ali as his partner in the Marbles game, believing that the two of them will be a formidable pair against the other players, only for him to find out they will have to face each other, instead of playing together.