Demons' Crest, Vol. 1 (light novel) — Reki Kawahara

Yuuma Ashihara is playing Actual Magic, a virtual reality MMORPG, when it suddenly begins to fuse with the real world. While he tries to make sense of what's happening, he runs into Sumi, one of his classmates. Before, she was one of the cutest girls in his grade, but she's undergone a terrible metamorphosis -- into one of the game's monsters! From the author of Sword Art Online and Accel World comes a story beyond VR and AR, where game and reality are one and the same.