Balancing

[Kaimetsu]

Why not just make the damage proportional to the number of people using it? Have a base damage, and then apply a modifier based on the relative popularity of the weapon. Then everything gets balanced out pretty nicely, and people are encouraged to try all the different options.

You'd probably need to do some tweaking to get it working nicely, and maybe there'd have to be some means by which the players can see the current popularities (else it would be too difficult to know how powerful a given weapon currently is), but still, it doesn't sound like too much work.

On a similar note, you could alter the worlds so that the experience and money rewards are based on the average playercount. Or, for the team-based worlds, make it so that you get more experience if your team is smaller than your opponent's.