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How should I handle nerfing a player for the purposes of game balance?

Background

I run a Live Action Role-Playing game on a monthly basis (from March through November) for anywhere from 10-30 PCs (with 3 other Plot members and anywhere from 0-10 NPCs). The majority of these PCs do not take extreme efforts to increase their own power-levels. There are some methods in our game via which a character can do so:

  • Magic Items
  • Transforms (which only enhance you on higher statted modules)
  • Golems (which are expensive, last 5 days, convey their enhancements constantly, and cause you to immediately resurrect when you would otherwise have 6 minutes to be healed)
  • Curses of Transformation (these normally turn you into a "bad guy" as a side effect: an example would be a werewolf)
  • Infections (these normally turn you into a "bad guy" as a side effect, but you retain your own memories and skills)

One of the characters has chosen to take advantage of every available method to increase his own power: he is working for the bad guys (and has an infection), he has a transform, he has several magic items, and he casts a golem on himself every event.

I am generally satisfied with where the challenge level of the game is for him, and I am satisfied with where the challenge level of the game is for the other players. The issue arises when he and the other players are involved in combat together, as unless I have something very compelling distracting him, he is able to overcome challenges intended for other adventurers in a fraction of the time it would take them.

There is also the good chance that he, alone, could kill the entire town. When I try to present one big bad and multiple cronies, the other characters leave him to fight the big bad alone; when I presented several powerful monsters (that were statted for them) simultaneously they hid until he had taken all of them out.

Research and Other Attempts

Some other chapters that run the same LARP we do have instituted a rule that prevents you from having more than one "Alteration" in effect at a time. I considered that but received a significant amount of push-back from the affected player regarding the amount of time and effort he had invested in a particular play-style that would be negated by this change. The option that is currently on the table is to limit him to 1 Alteration in "Town," 2 Alterations on open modules, and an unlimited number of Alterations in closed modules. I also considered limiting him to 1/2/UNL active templates, and having weaker versions of the inactive templates.

That raises another issue. Should he be able to determine which Alteration is active at a given time, or should that order be chosen by us? Currently, you can't just step out of a golem, and they have the most significant disadvantage for him.

I have attempted to build encounters with multiple types of obstacles - some targeted at him and some targeted at other players. I have found that I am not very good at this.

Increasing the amount of role-play or tactical obstacles seems like the wrong approach, as he is in some cases, more capable than most of the rest of our players in those regards.

Question

What is the best, effective way to prevent a player's power from unduly affecting the fun and success of other players?