Transform Magazine: Crafting Brand Identity in the Metaverse – 2025

Zak McKinven, COO at Brand Lounge, explores the vast opportunities presented by the metaverse and how brands can fully leverage them.

Not long ago, the metaverse seemed like a concept straight out of science fiction, more suited to video games than corporate discussions.

Today, Napster’s recent acquisition for US$207 million highlights the metaverse’s revolutionary potential. By transforming a music streaming service into immersive 3D environments where fans can attend concerts and artists can sell merchandise across both physical and digital landscapes, this move showcases how brands are forging entirely new connections with audiences in the metaverse.

This evolution redefines what a brand signifies in a realm devoid of shelves and limitations, where audiences engage as avatars. Brand experiences thrive at the intersection of our physical and digital worlds, or “phygital” experiences.

More than just a game

While interpretations of the “metaverse” differ, a common aspect is immersive, shared digital environments where individuals meet, create, play, and even shop. Platforms like Roblox, Fortnite, Decentraland, and Meta’s Horizon Worlds represent early iterations of this ecosystem. Though they may resemble games, they have evolved into social hubs, marketplaces, and canvases for brand narratives. The industry is projected to reach a staggering US$13 trillion in value by 2030.

This creates both opportunities and challenges for brands: how can you establish a presence in a world that operates differently from traditional internet spaces? The brands that succeed are not merely utilizing the metaverse as an advertising platform but are crafting engaging experiences that go beyond direct selling.

From global giants to local players

Nike boldly ventured into Roblox with the creation of NIKELAND, a digital realm complete with branded arenas, avatar outfits, and interactive mini-games. This was more than simple product placement; it was a vibrant, engaging experience aligned with Nike’s ethos of movement and innovation, drawing millions of visitors and positioning the brand as a relevant entity in digital culture.

Similarly, Coca-Cola and Pepsi have explored this landscape through NFT drops and virtual collectibles, while Samsung and RAK Ceramics have established immersive showrooms in Decentraland. Brands such as Adidas, Vans, Hyundai, 6th Street, and Balenciaga have launched virtual activations with a shared theme: engaging audiences where they already are, rather than drawing them into brand-controlled environments.

Why it’s effective

Consumer interaction with brands is evolving. For Gen Z and Gen Alpha, digital identity holds significant personal value. The avatars’ attire, regularly visited worlds, and chosen experiences all convey aspects of one’s identity.

As a result, brand presence shifts from focusing on product sales to integrating within someone’s digital lifestyle. The most effective brand activations in these virtual spaces excel at several key areas:

• Provide value beyond commercial interests – this could include entertainment, exclusivity, fun, or self-expression.
• Foster community rather than mere awareness – empowering co-creation and active participation.
• Align with platform culture – understanding the unique vibe of each space is crucial. It’s important for the brand to resonate with its audience’s values without coming off as gimmicky, whether creating a new digital environment or engaging in an existing one.
• Encourage creativity – Free from the constraints of physical space, brands can explore opportunities in the metaverse that wouldn’t be possible in the real world, such as global sneaker launches or interactive concerts.

Risks and rewards

Of course, there are inherent risks. The metaverse is still in its formative stages, and not every initiative will succeed. Some brands have faced backlash for awkward user experiences or tone-deaf NFT launches. Concerns around data privacy, digital ownership, and accessibility are valid.

Nonetheless, the potential rewards are significant: brands that experiment now are laying the groundwork for how brand interactions will take shape in the coming decade. The true challenge will be achieving positive ROI—while creating these digital spaces can be expensive, AI may provide efficiencies. Regardless of the specific metaverse experience, it must yield favorable outcomes in terms of user experience, brand visibility, and sales.

Looking ahead

The metaverse is not a singular location, nor is it fully realized—that’s part of its allure. It serves as a blank canvas where identity, experience, and community take precedence over polished campaigns or advertisements.

The constraints of physical venue experiences can be prohibitive, but forward-thinking brand strategists are seizing the chance to merge physical and digital interactions, crafting more engaging brand experiences. In the metaverse, brands can network, unveil new products and services, train staff, and unite communities globally.

Whether hosting virtual product launches, offering digital merchandise, or simply establishing a presence on the right platform, brands are discovering that in the metaverse, they’re not just narrating their story—they’re inviting audiences to live it alongside them.