What works is going to be based on the individuals on the team, the business culture, and available resources. My advice is to pick something focused on a shared positive experience, be open with the team about the intent and honest about the possibility that it might fail and admit the fear that it might seem silly.

On the other hand, if the culture is a constant deathmarch of deadlines, then it is critical to push the deadlines back more days than are given to teambuilding. Otherwise, it's not so much a waste of time from a business perspective as it is from a personal one.

Good luck.