SAN FRANCISCO >> Mark Zuckerberg embraced a digital world known as the metaverse when he said in November 2021 that he was changing his company’s name from Facebook to Meta.

A month later, Bill Gates, co-founder of Microsoft, wrote that within two or three years, he believed most virtual meetings would transition from two-dimensional grids of video “to the metaverse, a 3D space with digital avatars.”

Soon after, Microsoft announced that it would spend $70 billion to buy video game giant Activision Blizzard and said the deal would “provide building blocks for the metaverse.”

But since then, interest in the metaverse has stalled. Technology investors have moved on to new trends like artificial intelligence. And some metaverse projects have been shuttered at companies such as Disney and Microsoft, despite that burst of enthusiasm.

Enter Apple. At its Worldwide Developers Conference starting Monday, the tech giant is expected to debut its virtual reality hardware product: high-tech goggles that blend together the digital and physical worlds.

The company is betting that it can tempt consumers with mixed-reality products better than Meta, whose high-end Quest Pro headsets have not sold well, and that it can ignite mainstream interest in virtual reality in a way that other companies have not. The Apple headset is expected to cost about $3,000 and will look like ski goggles, according to current and former employees familiar with its development.

Apple has done this before. Eventual hits such as the iPod, iPhone and Apple Watch started in niche markets that grew into big businesses. But even Apple executives have been skeptical about the company’s prospects in virtual reality, which, they say, may still not be ready for its mainstream moment.

Apple declined to comment.

The idea of an immersive, all-encompassing online universe made more sense to many investors when people weren’t leaving their homes during the height of the pandemic. Metaverse-related startups raised about $664 million in venture capital in the first five months of 2023, a drastic drop from the more than $2.93 billion they raised in the same period in 2022, according to data compiled by PitchBook. That drop-off cuts recent metaverse startup investment to about a quarter of its peak in the first half of 2022, PitchBook said.

“The metaverse investment fad — it came and went, and now people are focused on AI,” said Doug Creutz, an analyst at Cowen & Co. “The people who were hopping on it because it was a sexy thing to talk about have hopped back off.”

This year, Microsoft shuttered a virtual-reality world, called AltspaceVR, that it acquired in 2017. The company also laid off some employees working on its HoloLens mixed-reality headset and eliminated or reassigned teams that had been working on metaverse projects, according to a person familiar with the changes.

In a statement, Microsoft said it was still committed to the metaverse and pointed to the news that it was rolling out 3D avatars for Microsoft Teams meetings.

Disney also laid off about 50 employees who had been working on metaverse projects, according to a person familiar with the cuts. News about Microsoft’s and Disney’s cuts was reported earlier by The Wall Street Journal.

At Meta, Zuckerberg’s plan to restructure the company around metaverse-centric technologies has been costly. Meta’s hardware unit, Reality Labs, which includes its Oculus headsets, is responsible for a significant part of Meta’s recent big increase in spending. That division lost about $4 billion in the first three months of this year.

Zuckerberg cautioned that building the metaverse would be a money-losing proposition with little promise of early returns. Still, it has taken much longer than he anticipated. In recent months, Zuckerberg and his lieutenants have spent more time talking up Meta’s expertise in AI, although he has bristled at the notion that the metaverse is no longer his focus.

“A narrative has developed that we’re somehow moving away from focusing on the metaverse vision,” he said in a call with investors in April. “So I just want to say upfront that that’s not accurate. We’ve been focusing on both AI and the metaverse for years now, and we will continue to focus on both.”

A Meta spokesperson, Ashley Zandy, said: “We’ve always been clear that our metaverse vision is a long-term one, and nothing about that has changed. We are committed to our metaverse vision, and we’re seeing good momentum.”