My sister has a huge unfinished basement that they use as a rec room. What they did was buy some carpet remnants from a carpet outlet store to lay down on the floor. Then they hung sheets over the insulated walls on curtain rods, but if it is too wide, you could probably tack sheets to the studs. They even put a woodstove down there since it is not heated space. They have parties and the kids love hanging out down there.
Marsha