Dublin, Aug. 27, 2025 (GLOBE NEWSWIRE) -- The "Immersive Reality For Defense Global Market Report 2025" report has been added to ResearchAndMarkets.com's offering.
The immersive reality for defense market size has grown rapidly in recent years. It will grow from $2.33 billion in 2024 to $2.71 billion in 2025 at a compound annual growth rate (CAGR) of 16.1%. The growth in the historic period can be attributed to training and simulation, situational awareness enhancement, remote operations and maintenance, battlefield planning and strategy, and medical training and rehabilitation.
The immersive reality for defense market size is expected to see rapid growth in the next few years. It will grow to $4.9 billion in 2029 at a compound annual growth rate (CAGR) of 16%. The growth in the forecast period can be attributed to advancements in AI and machine learning, increasing defense budgets for AR/VR training, rising demand for remote warfare solutions, integration with IoT and wearable technology, and enhanced cybersecurity for virtual environments. Major trends in the forecast period include AI-driven virtual simulations, AI-powered battlefield visualization, haptic feedback, and tactile interfaces, cloud-based immersive training platforms, and 5g-enabled real-time collaboration.
The forecast of 16% growth over the next five years remains unchanged from the previous projection for this market. Despite the stable forecast, ongoing tariff-related uncertainties between the U.S. and its trade partners continue to pose risks. This is likely to directly affect the US through tariffs on high-resolution VR headsets from Taiwan and South Korea, raising costs for military training simulations. The effect will also be felt more widely due to reciprocal tariffs and the negative effect on the global economy and trade due to increased trade tensions and restrictions.
The growth of synthetic training environments is expected to drive the expansion of immersive reality in the defense market. These environments are computer-generated simulations created to replicate real-world scenarios for training purposes. The demand for synthetic training environments is increasing due to advancements in immersive technologies, which provide enhanced realism, cost-effectiveness, and scalability for military training, while reducing the reliance on live exercises.
By simulating realistic combat situations, immersive reality improves decision-making and lowers operational risks in defense training. For example, in September 2022, Teal Group Corporation, a US-based aerospace and defense market analysis firm, reported that unmanned aerial systems procurement spending is expected to rise from nearly $12.1 billion annually in 2023 to $16.4 billion by 2032, marking an increase of $4.3 billion per year. This growth is projected to total $162.2 billion over the next decade, reflecting the growing role of synthetic training environments in driving the immersive reality defense market forward.
Companies in the immersive reality for defense market are focusing on technological innovations such as mixed reality cockpits to enhance pilot training, improve situational awareness, optimize mission planning, and create realistic combat simulations. Mixed reality cockpits combine virtual and augmented reality to offer pilots immersive, interactive, and real-time operational training experiences. For instance, in January 2025, Vertex Solutions LLC, a US-based technology company, delivered its first upgraded reconfigurable enhanced immersive training device (eITD), configured as a T-38, to the U.S. Air Force's Detachment 24 at the 19th Air Force. This delivery marked the integration of mixed reality cockpits into the Air Force's Fighter Bomber Fundamentals curriculum, revolutionizing advanced pilot training with cutting-edge simulation technology.
In March 2023, Leonardo SpA, an Italy-based aerospace, defense, and security company, partnered with Varjo to improve pilot training realism and efficiency through high-fidelity extended reality (XR) solutions. This collaboration uses Varjo's advanced XR technology to create immersive and highly realistic simulation experiences, enhancing training effectiveness for both aviation and defense sectors. Varjo, based in Finland, is known for its expertise in extended reality (XR) technology.
Immersive reality for defense involves the use of advanced virtual, augmented, and mixed reality technologies to enhance military training, operations, and decision-making. It enables realistic simulations, mission planning, situational awareness, and remote collaboration by immersing personnel in interactive, data-rich environments. The key components of immersive reality for defense include hardware, software, and services. Hardware encompasses the physical devices and components that facilitate virtual, augmented, and mixed reality experiences for military applications. The various technologies include virtual reality (VR), augmented reality (AR), and mixed reality (MR), which are applied in domains such as training and simulation, medical training and healthcare support, maintenance and repair, and combat operations.
Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report's Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.
The sharp increase in U.S. tariffs and resulting trade disputes in spring 2025 are significantly affecting the aerospace and defense sector. Prices for key materials such as titanium, carbon fiber composites, and avionics primarily sourced from international suppliers have surged. Defense contractors, constrained by fixed-price government contracts, are forced to absorb these rising costs. Meanwhile, commercial aerospace companies are encountering resistance from airlines over increased aircraft prices. In addition, customs delays are disrupting already tight production timelines for jets and satellites. In response, the industry is stockpiling essential materials, pursuing import waivers for defense-related goods, and working with allied nations to diversify supply chains.
North America was the largest region in the immersive reality for defense market in 2024. The regions covered in immersive reality for defense report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa. The countries covered in the immersive reality for defense market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.
Scope
Markets Covered:
- Component: Hardware; Software; Services
- Technology: Virtual Reality (VR); Augmented Reality (AR); Mixed Reality (MR)
- Application: Training And Simulation; Medical Training And Healthcare Support; Maintenance And Repair; Combat Operations
Subsegments:
- Hardware: Head-Mounted Displays; Simulators; Sensors; Cameras; Wearables
- Software: Simulation Software; Immersive Applications; Three-Dimensional Visualization Tools; Artificial Intelligence/Machine Learning Integration; Data Integration Software; Collaboration Tools
- Service: Training And Simulation Services; System Integration Services; Maintenance And Support Services; Consulting And Customization; Content Creation; Cybersecurity Services
Immersive Reality For Defense Market Competitive Landscape And Key Company Profiles
- Immersive Reality For Defense Market Competitive Landscape
- Immersive Reality For Defense Market Company Profiles
- EON Reality Inc. Overview, Products and Services, Strategy and Financial Analysis
- Lockheed Martin Corporation Overview, Products and Services, Strategy and Financial Analysis
- Honeywell International Inc. Overview, Products and Services, Strategy and Financial Analysis
- Thales Group Overview, Products and Services, Strategy and Financial Analysis
- HCL Technologies Limited Overview, Products and Services, Strategy and Financial Analysis
Other Immersive Reality For Defense Major Companies
- CAE Inc.
- AVEVA Group PLC
- Barco NV
- Vertex Solutions LLC
- Magic Leap Inc.
- Varjo Technologies Oy
- Bohemia Interactive Simulations s.r.o.
- Vection Technologies Ltd
- Indra Sistemas S.A.
- HTX Labs Inc.
- Red Six Aerospace Inc.
- VRgineers Inc.
- Blippar Ltd.
- SimX Inc.
- Imagine 4D Inc.
- VRMADA LLC.
For more information about this report visit https://www.researchandmarkets.com/r/a8rzlh
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