One of the projects I have on my endless things to do is to create a computer RPG (maybe dabbling in the action RPG genre) in where the characters are dressed up and playing in a LARP.
Weapons are foam weapons. Confetti or water balloons for area effect spells, serpentine or other similar effects for line attacks, ... . NPCs are also people dressed, and maybe some cardboard cutouts for goblins, kids, and other things that could be big in numbers or shouldn't take part in a larp.
I don't know what things go in the back, such as, should some NPCs just be GMs doing the rolls and acting on the scenery? It probably would be easier to make it straight, but it would be less "fun".