Eunyoung Sung, Ohbyung Kwon, Jinyoung Im
Purpose This study’s aim is to examine the effects of actual metaverse users’ parasocial relationships with artificial intelligence– (AI-) controlled non-player characters (NPCs) on digital luxury non-fungible token (NFT) brand preferences leading to behavioral intentions (e.g. online and offline purchase intentions, virtual-to-real behavioral activities, NFT luxury brand endorsements on social medial platforms). The study focuses on Gen Z users who seek escapism by forming parasocial relationships with NPCs, which ultimately leads to digital NFT brand preference and, in turn, affects their behavioral intentions to consume luxury fashion brands. Design/methodology/approach The usable sample size for the partial least squares structural equation modeling analysis was 348 (of 400) actual metaverse platform users (Gen Z) in the USA. Findings Among the metaverse users, the parasocial relationships with AI-controlled NPCs formed through NPCs’ emotional and cognitive intelligence lead to metaverse social connectedness, which in turn results in luxury NFT brand preferences and a virtual-to-real behavioral spillover. Furthermore, Gen Z users’ positive virtual social connectedness influences not only their metaverse purchase intentions but also their real-world purchase intentions through a virtual-to-real behavioral spillover, highlighting the positive function of AI. Originality/value To the best of the authors’ knowledge, this study is one of the first to address engagement through AI-controlled NPCs by separating emotional and cognitive intelligence, thus filling an important research gap. It demonstrates that luxury brands need different marketing strategies for digital NFTs and real items and thus need to understand consumer psychological mechanisms.