Faster lan parties???

There can be many factors but...

If my guess is right, you have packet collisions problem due to broadcast packets. Making things short, in your switch network, PCs send out broadcast packets that go out to all switch ports except the one originally came in. The more PCs you have the more broadcast it generates. The amount depends on application in use too, your game for i.e.

Primary solution is to divide the network into multiple collision domains with the use of VLANs. You need VLAN capable switch. Now it works like this: when a broadcast comes in, it only goes out to ports that are in the same VLAN group instead of all ports, reducing collisions. When you set up VLAN, you also need to set up inter-VLAN communication/routing/forwarding. This inter-VLAN routing can be done by

1) the layer 3 VLAN capable switch OR
2) router-on-a-stick scenario

I know some work involved but when you do it, you'll learn a lot of new things. VLANs are not layer-3 concept.

Another different factor can be cheap switch. Try upgrading your switch to gig switch and see if it goes away.

Actually, each switch port has its own collision domain, so I don't think that's the problem here. Plus, I don't think he needs to set up a VLAN.

He probably does need a better switch though, if it's cheap. Most likely it can't keep up passing all the frames through.

Also, if one of the computers has to act as the server for the game make sure it's on a Gigabit port and the computer has a Gigabit NIC. I can't really tell you much more as there isn't enough information on how things are set up on your LAN. It sounds like a fun party too.  

Yes, each switch port has its own collision domain but only true for regular non-broadcast traffic. When I say broadcast, I mean MAC broadcast, FF:FF:FF:FF:FF:FF. In that case, the switch will forward out to all ports except the one it came in.