It’s best to have the magic show inside. Acoustically, having a party outside can make the magic show less impressive. There may be airplanes flying over or lawnmowers buzzing in the neighbor’s yard. For larger parties, people in the back may have a difficult time hearing and can become chatty which will create more noise as they get restless.
Sometimes it can work to your advantage to have the kids playing outside when the magician arrives and sets up props inside. The kids will have a bigger reaction when they walk into the house and see the show for the first time. Nate can send the kids back outside to burn some energy after the show while he packs up. He can then head outside to make balloon animals. This way all the craziness can be contained outside.
If you do decide to have the party outside, Nate will make the best of it and still put on a wonderful show. Please consider where the sun will be during the performance. Most magic shows last 30-45 minutes and it could be uncomfortable to have either the audience or the magician looking into the sun.