Modern capstone courses use agile methods to deliver and demonstrate software early in the project. However, a simple demonstration of functional and static aspects does not provide real-world software usage context, although this is integral to understand software requirements. Software engineering involves capabilities such as creativity, imagination, and interaction, which are typically not emphasized in software engineering courses. A more engaging, dynamic way of presenting software prototypes is needed to demonstrate the context in which the software is used. We combine agile methods, scenario-based design, and theatrical aspects into software theater, an approach to present visionary scenarios using techniques borrowed from theater and film, including props and humor. We describe the software theater workflow, provide examples, and explain patterns to demonstrate its potential. We illustrate two large case studies in which we teach students with varying levels of experience to apply software theater: a capstone course involving industrial customers with 100 students and an interactive lecture-based course with 400 students. We empirically evaluated the use of software theater in both courses. Our evaluations show that students can understand and apply software theater within one semester and that this technique increases their motivation to prepare demonstrations even early in the project. Software theater is more creative, memorable, dynamic, and engaging than normal demonstration techniques and brings fun into education.