Any thoughts about making USD/USDZ files with particle effects? Things on fire/sparking etc?

This is not currently possible to do in a USD, but you should submit the idea to https://feedbackassistant.apple.com.

You can however do some particle effects in an app by using RealityKit's CustomShaders.

Depending on how complex your effect is, you can also bake your particle effects to regular mesh + bones animation :sparkles:

In many cases you can also create a pretty convincing effect just by scaling/rotating a few planes. Example link (no USDZ behind that right now, but you get the idea - this is just two simple meshes for the particles)

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