Immersive Reality for Defense Market Report 2026

The immersive reality for defense market size has grown rapidly in recent years. It will grow from $2.71 billion in 2025 to $3.14 billion in 2026 at a compound annual growth rate (CAGR) of 16%. The growth in the historic period can be attributed to increasing investment in military training and simulation programs, advancements in virtual, augmented, and mixed reality technologies, growing demand for realistic and safe combat training environments, rising adoption of immersive technologies for situational awareness and mission rehearsal, expansion of defense budgets supporting technology integration.

The immersive reality for defense market size is expected to see rapid growth in the next few years. It will grow to $5.67 billion in 2030 at a compound annual growth rate (CAGR) of 15.9%. The growth in the forecast period can be attributed to integration of AI and machine learning for adaptive training and real-time decision support, development of collaborative and networked vr/ar/mr systems for joint operations, rising adoption of wearable and portable immersive devices, increasing use of immersive reality for remote maintenance and battlefield support, expansion in emerging defense markets with modernized military training programs. Major trends in the forecast period include growing demand for realistic, high-fidelity battlefield simulation environments, rising adoption of immersive tools for remote maintenance and repair in defense operations, expansion of immersive training for medical and trauma response in military contexts, increasing use of vr/ar systems for mission rehearsal and strategic planning, higher integration of immersive systems into soldier-wearable platforms.

The rising defense and military expenditures is expected to propel the growth of the immersive reality for defense market going forward. Defense and military expenditures refer to governments and defense organizations allocating larger and sustained budgets toward procurement, training, and R&D to strengthen military capabilities. Governments are boosting spending mainly due to escalating geopolitical tensions and regional conflicts. Immersive reality for defense aligns with this demand by offering cost-effective, high-fidelity training, faster R&D processes, and scalable mission rehearsal solutions that defense buyers increasingly value. For instance, in April 2025, according to the Stockholm International Peace Research Institute (SIPRI), a Sweden-based global security research institute, global military spending reached $2.71 trillion in 2024, reflecting a 9.4% real-term increase from 2023, the sharpest annual rise since the end of the Cold War. Therefore, the rising defense and military expenditures is expected to drive the growth of the immersive reality for defense market.

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 companies operating 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., VRMADA LLC.

North America was the largest region in the immersive reality for defense market in 2025. The regions covered in the immersive reality for defense market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.

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.

Tariffs are increasing the cost of importing immersive hardware including sensors, displays, cameras, and simulation equipment raising deployment expenses for defense organizations. Hardware-heavy segments and regions reliant on global electronic components, such as North America, Europe, and Asia-Pacific, are most affected. While these tariffs may hinder short-term adoption, they also promote domestic production, strengthen supply chain independence, and encourage innovation in locally manufactured AR/VR/XR defense technologies.

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.

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 countries covered in the immersive reality for defense market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

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 that 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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