RPG Theater is the practice of creating an immersive environment that fosters fun high quality role-play using theatrical techniques. Mood is enhanced through the use of sound, lighting, solid handouts, and limited props. This works well virtually for many with immersion coming with good sound and informational and story color handouts delivered via a variety of virtual table tops!
Lighting and sound changes signal and augment changes in the scenes. A dark night scene might be played in a dim blue light with the sound of crickets in the background. When the crickets stop, the participants are sure to notice and worry. Bright light and a dry wind helps to suggest a hot sunny day and dim diffuse light with drizzling rain a dark dreary day. Sound tracks and environmental sound effects also help create a rich environment and subtle mental landscape that are very effective in evoking the feel of the scene.
Good effect can be achieved with a dark room, a simple household dimmer, table lamps, a few flashlights, and a basic sound system. (While not quite the same a good headset and isolated space helps with virtual play.) Some well-chosen background music or soundscape can really help set the scene. It is all about the atmosphere, mood, and having fun!