A powerful demon lord from the underworld could be the main villain. This demon lord could be seeking to expand his territory into the Naruto world, using his dark magic and hordes of minions.
It could be a primordial being from the underworld that was sealed away long ago but has now been released. This being is angry at the world of Naruto for some ancient grudge and wants to bring destruction. It has the ability to control the minds of the weak - willed and uses this to create chaos in the Naruto world as a first step towards total annihilation.
Kaguya could be a great main villain for this. Imagine Kaguya emerging on Halloween night, her already otherworldly appearance made even more menacing with spooky Halloween - like enhancements. She could use the energy of the night to her advantage, trying to plunge the world into eternal darkness, and Naruto and his friends have to stop her.
It could be Orochimaru. He might be interested in Tenten's unique weapon skills and Naruto's power of the Nine - Tails. He could try to capture them to conduct experiments on how to combine their powers for his own gain. He might create some sort of hybrid - clone with Tenten's weapon - using abilities and Naruto's chakra.
Maybe a new character, a powerful sea witch who has been influenced by the power - hungry ways of some of Naruto's villains. She wants to rule both the underwater world and the land world above. She would use her magic to create chaos and try to stop Naruto and Ariel from uniting their forces.
It could be Zeref from Fairy Tail. His dark magic combined with his immortality would make him a formidable foe for a godlike Naruto. He might see Naruto's power as a threat and try to eliminate him, or use him to achieve his own dark goals.
Another option could be a new character created specifically for this crossover. This character could be a wizard who has studied the ninja arts and has become corrupted by power. He could start by causing chaos in the wizarding world, using his magic to mimic some of the more dangerous ninja techniques. Then, he could set his sights on the ninja world, seeing it as another source of power to be conquered. Fem Naruto and Harry Potter would have to put aside their differences and work together to stop him.
Madara Uchiha could be a great main villain in such a crossover. His already powerful ninja abilities combined with the potential of getting a Geass power would make him extremely dangerous. He could use Geass to control other ninjas and make them fight for his cause, like creating an army of mind - controlled shinobi to take over the world.
It could be an evil ninja who has learned to use dark magic and wants to take over Pixie Hollow for its magic. He sees the fairies' magic as a source of power to enhance his own dark jutsu.
Another option could be Kabuto. He has been influenced by Orochimaru and is always looking for ways to gain more power. He might target Kurenai to learn more about her genjutsu and Naruto because of his status as a hero. Kabuto could be plotting to use their powers to further his own goals in the ninja world.
Perhaps it could be a character who is jealous of both Naruto and Hercules. A sorcerer who was once shunned in both worlds and now wants to prove himself by defeating them. He could use dark magic to create chaos and try to stop Naruto and Hercules from uniting and using their combined powers.
It could be Bowser who has somehow gained the power of a powerful ninja jutsu. He uses this new - found power to take over both the Mushroom Kingdom and start invading the Naruto world. His fire - breathing ability combined with ninja techniques would make him a formidable foe for Naruto and Mario.