Immersive Reality for Defense Market Report 2025

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 16.2%. The growth during the historic period can be attributed to several factors, including advancements in training and simulation, enhancement of situational awareness, the rise of remote operations and maintenance, improvements in battlefield planning and strategy, and the use of immersive reality in 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 $4.91 billion in 2029 at a compound annual growth rate (CAGR) of 16%. The projected growth during the forecast period can be attributed to several factors, including advancements in AI and machine learning, increasing defense budgets for AR/VR training, growing demand for remote warfare solutions, integration with IoT and wearable technology, and enhanced cybersecurity for virtual environments. Key trends during this 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 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.

Major players in the immersive reality for defense market are EON Reality Inc., Lockheed Martin Corporation, Honeywell International Inc., Thales Group, HCL Technologies Limited, 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., and VRMADA LLC.

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.

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.

The immersive reality for the defense market research report is one of a series of new reports that provides immersive reality for defense market statistics, including immersive reality for the defense industry's global market size, regional shares, competitors with a immersive reality for the defense market share, detailed immersive reality for defense market segments, market trends and opportunities, and any further data you may need to thrive in the immersive reality for the defense industry. This immersive reality for the defense market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The immersive reality for defense market consists of revenues earned by entities by providing services such as military training and simulation, mission planning and rehearsal, situational awareness and battlefield visualization, and remote maintenance and repair assistance. The market value includes the value of related goods sold by the service provider or included within the service offering. The immersive reality for defense market includes sales of virtual reality (VR) headsets, augmented reality (AR) glasses, mixed reality (MR) systems, and military training simulators. Values in this market are ‘factory gate’ values, that is, the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values and are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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