This works for me:

itemname = itemname.replaceAll("\\s+", "_").toLowerCase();

replaceAll("\\s+", "_") replaces consecutive whitespaces with a single underscore.

"first topic".replaceAll("\\s+", "_") -> first_topic

"first topic".replaceAll(" ", "_") -> first__topic

For generality, I would define a function that accepts the old and new delimiters as parameters, then overload it to make the underscore and space as defaults.

To avoid the special case for input.isEmpty(), I would define a boolean variable to indicate whether the previously encountered character was an underscore. You would also avoid having to re-inspect the previous character to see whether it was an underscore.

You can edit the string in place (using the same buffer for the input and output). It's slightly less cumbersome than calling the StringBuilder methods, in my opinion.

public class ReplaceUnderscore {

    public static String replace(String input) {
        return replace('_', ' ', input);
    }

    public static String replace(char oldDelim, char newDelim, String input) {
        boolean wasOldDelim = false;
        int o = 0;
        char[] buf = input.toCharArray();
        for (int i = 0; i < buf.length; i++) {
           assert(o <= i);
           if (buf[i] == oldDelim) {
               if (wasOldDelim) { continue; }
               wasOldDelim = true;
               buf[o++] = newDelim;
           } else {
               wasOldDelim = false;
               buf[o++] = buf[i];
           }
        }
        return new String(buf, 0, o);
    }
}

Use playerName.replace(' ', '_')