Doing multiple things at once in the same computer is complicated. One way of thinking about this is: What would happen if your friend were at your house, with physical access to your computer, and you both tried to use the same computer at once?

Although not necessarily impossible, you'll quickly run into limitations. Trying to connect a second mouse and keyboard will not get recognized as a separate mouse and keyboard by the computer, and the games. Even with controllers, trying to open different games will not work well unless the game lets you assign the specific controller it can and can't use, to avoid conflicts. Some games will not even allow input when they're not the active window.

With that in mind, there are some ways to go about it, with their own drawbacks.

Method 1: Virtual machines

A virtual machine is a separate computer inside your own computer, that can be connected to with Parsec, and used for whatever. Meanwhile, the actual computer is still able to be used without conflicts. Your hardware must be pretty beefy to be split in half while maintaining acceptable performance.

One of the routes you can go is to use James’ Easy-GPU-PV script. It uses GPU Paravirtualization to split one GPU to be used by the actual machine and your virtual machine. However it has issues of its own that you can see in the readme, and in addition, GPU Paravirtualization isn’t particularly a stable feature, so you may not have it work as intended.

If you want to avoid Easy-GPU-PV’s issues, there are other more manual VM setups where you need two graphics cards, so one of them can be completely dedicated to the VM (full gpu passthrough). You'll need to learn how to mess with other VM setups on your own and deal with any issues that may come up by yourself.

Method 2: Split-screen shenanigans

Keep both things using a portion of one screen, or, if you have two screens, stream Parsec on one of them and keep things separate across these two screens. Deal with what input goes to what program to allow people to control the correct stuff.

With this you don't need to deal with setting up a virtual machine at all, but you'll depend on scripts built by other users that achieve whatever is necessary for setting up games not made for split-screen, or you'll have to use your creativity to come up with shenanigans.

Here are some useful programs that help with the process. Either scripts that will do things mostly automatically, or programs that let you make your own botched solution.

• NucleusCoop: Scripts and info made for each game by dedicated users, to make split-screen possible. If your game has a script made for it, it's the way to go. As an example, I have personally used this for a game called Hollow Knight along with a multiplayer mod
• Universal Split Screen: In case Nucleus doesn't have support for your game, you can use this too for assigning specific controllers to games that don't let you do that, it should also have stuff for background input. The mouse part doesn't work on Parsec, don't bother trying
• FakeFocus: A fork of Universal Split Screen with just the part that lets you bypass games not allowing background input
• OnTopReplica: Lets you create a visual replica of a program and keep it on top of everything else, in whatever size you want, with whatever opacity percentage you want. Can be used to customize how games are displayed on your screen. I've used it to create a small view of my game on the second monitor, so that the other person can see my game, and vice-versa
• AutoHotkey: The ultimate botch tool, if you're a more techy user and are willing to google around and script something yourself. I've personally made some hotkeys to help me make console emulators be split-screen more easily. It lets me resize games to one of four sides on the screen, get rid of the Windows title bar, and keep games always on top

The main things to keep in mind with or without scripts are:

• There's no way to have separate mouse/keyboard setups in one Windows desktop with Parsec, so anything that relies on that is impossible. You'll be able to have one person at most with full control over a mouse and keyboard.
• You'll need a good amount of liberty over input configuration in games. If you want a separate controller for each game, the game needs to allow you to manually choose what controller is used in each. If you want multiple people on a keyboard, you need to configure different keys on the keyboard for each person