(MENAFN- GlobeNewsWire - Nasdaq) The market shows strong growth potential driven by military demand for AR systems enhancing soldier capabilities. Opportunities abound in refining AR/VR technologies for combat and training applications, despite challenges like procurement delays and US trade tariffs. The push for local innovation is evident.

Dublin, Dec. 02, 2025 (GLOBE NEWSWIRE) -- The "Defence AR/VR & Simulation Market Report 2025-2035" report has been added to ResearchAndMarkets's offering.
Defence AR/VR & Simulation Market will surpass US$10.50 billion in 2025 with strong revenue growth through to 2035
Military demand for head-worn augmented reality that directly improves soldier situational awareness and mission command is driving rapid investment in mixed-reality systems. The U.S. Army's long-running Integrated Visual Augmentation System (IVAS) program-after early iterations and user feedback cycles-moved toward a new industry posture in 2024-2025 when Microsoft and other partners began shifting program leadership and development responsibilities toward specialist defence firms that can integrate advanced edge compute, AI, and battlefield data fusion. This evolution reflects a deeper lesson: armed forces now view AR headsets not as point gadgets but as persistent mission platforms that must interoperate with drones, sensors, and C2 networks; procurement and R&D budgets are following that systems view.
Commercial and defence suppliers are responding by refining optics, ergonomics, and soldier-worn form factors and by concentrating on mission-relevant software: persistent overlays for navigation, target cues, and automated data filtering. Startups and established defence primes alike are competing to address prior user complaints (comfort, eyestrain, software latency) while offering improved mission data integrations and hardened supply chains. The new supplier mix and active refocusing on soldier feedback shorten iteration loops and increase the probability of fieldable, large-scale deployments-turning AR from lab novelty to a credible procurement line item for infantry and mounted crews.
Procurement Cycles, Budget Seasonality and Legacy Program Drag
Defence procurement remains slow and risk-averse, which slows the pace at which promising AR/VR technologies move from pilot to scale. Large training and fielding contracts typically run on multi-year cycles with extensive interoperability, safety, and sustainment requirements; meanwhile, legacy contracts and incumbent suppliers sometimes lock in architectures that are expensive to replace. This mismatch between rapid commercial XR innovation and deliberate defence acquisition processes creates timing friction and can force suppliers to maintain dual product tracks (certified, slower versions for government and faster commercial variants), increasing overhead and slowing innovation adoption.
Budget seasonality adds another constraint. When defence budgets tighten or are re-prioritized toward urgent operational needs, synthetic training modernization can be deferred. Even when approvals exist, program rebase lining or impairment charges at prime vendors show that execution complexity-integrating software, hardware, facilities and training doctrine-remains significant. Consequently, some prospective deployments are staged or deferred, which lengthens commercial payback and elevates the importance of smaller, iterative contracting vehicles to maintain momentum.
What would be the Impact of US Trade Tariffs on the Global Defence AR/VR & Simulation Market?
U.S. tariffs on imported defence technologies, including AR/VR and simulation equipment, have created significant disruptions in global supply chains, impacting both manufacturers and end-users. These tariffs affect the cost structure of imported components, leading to increased prices for defence training solutions. Consequently, defence organizations worldwide have had to reassess procurement strategies, balance domestic production versus imports, and explore alternative suppliers to maintain operational readiness. While the tariffs introduce short-term challenges, they also create incentives for local manufacturers to innovate and scale production, potentially reshaping the global AR/VR and simulation market over the coming decade.
Key Questions Answered

• How is the global defence AR/VR & simulation market evolving?
• What is driving and restraining the global defence AR/VR & simulation market?
• How will each global defence AR/VR & simulation submarket segment grow over the forecast period and how much revenue will these submarkets account for in 2035?
• How will the market shares for each global defence AR/VR & simulation submarket develop from 2025 to 2035?
• What will be the main driver for the overall market from 2025 to 2035?
• Will leading global defence AR/VR & simulation markets broadly follow the macroeconomic dynamics, or will individual national markets outperform others?
• How will the market shares of the national markets change by 2035, and which geographical region will lead the market in 2035?
• Who are the leading players and what are their prospects over the forecast period?
• What are the global defence AR/VR & simulation projects for these leading companies?
• How will the industry evolve during the period between 2025 and 2035? What are the implications of global defence AR/VR & simulation projects taking place now and over the next 10 years?
• Is there a greater need for product commercialisation to further scale the global defence AR/VR & simulation market?
• Where is the global defence AR/VR & simulation market heading and how can you ensure you are at the forefront of the market?
• What are the best investment options for new product and service lines?
• What are the key prospects for moving companies into a new growth path and C-suite?

You need to discover how this will impact the global defence AR/VR & simulation market today, and over the next 10 years:

• This 431-page report provides 128 tables and 212 charts/graphs exclusively to you.
• The report highlights key lucrative areas in the industry so you can target them - NOW.
• It contains in-depth analysis of global, regional and national sales and growth.
• It highlights for you the key successful trends, changes and revenue projections made by your competitors.

Forecasts to 2035 and other analyses reveal commercial prospects

• In addition to revenue forecasting to 2035, the new study provides you with recent results, growth rates, and market shares.
• You will find original analyses, with business outlooks and developments.
• Discover qualitative analyses (including market dynamics, drivers, opportunities, restraints and challenges), cost structure, impact of rising global defence AR/VR & simulation prices and recent developments.

Market Dynamics

Market Driving Factors

• Rising Global Defence Expenditures Driving Adoption of Advanced Technologies
• Rapid Evolution of Military Simulation Systems in Line with Advancements in Aircraft and Jet Technologies
• AI-Driven Military Training Simulation Software Enhances Efficiency and Reduces Operational Costs

Market Restraining Factors

• Data Security and Cyber Threats Restrain the Market Growth
• Bandwidth and Infrastructure Limitations Restrain the Market Growth

Market Opportunities

• Development of Cloud-Based Simulation Platforms Opportunities for Market Growth
• Growing Investments in Next-Generation Soldier Systems Opportunities for Market Growth
• Partnerships Between Defense Contractors and Tech Firms Opportunities for Market Growth
• U.S. Tariffs: What's the Impact on Global Defence AR/VR & Simulation Market?

Leading companies profiled in the report

• Anduril Industries
• BAE Systems
• Bohemia Interactive Simulations
• CAE Inc.
• Elbit Systems Ltd
• HTC Corporation
• Kongsberg Defence & Aerospace
• Lenovo Group Limited
• Lockheed Martin Corporation
• Microsoft Corporation
• Raytheon Technologies (RTX)
• RealWear, Inc.
• Thales SA
• TRU Simulation + Training Inc.
• Varjo Technologies Oy..

Segments Covered in the Report

By Immersion Level

• Fully Immersive Systems
• Collaborative Multi-User Environments

By Solution Type

• Software
• Services
• Hardware

By End-User

• Military Forces
• Homeland Security
• Defence Contractors / OEMs
• Training & Research Institutions

By Technology

• Augmented Reality (AR)
• Virtual Reality (VR)
• Mixed Reality (MR)
• Extended Reality (XR)
• Other Technologies

By Application

• Training & Simulation
• Mission Rehearsal
• Battlefield Visualisation & Situational Awareness
• Equipment Maintenance & Repair
• Medical & Combat Care Simulation
• Design & Prototyping of Defence Systems

In addition to the revenue predictions for the overall world market and segments, you will also find revenue forecasts for five regional and 25 leading national markets:
North America

• U.S.
• Canada

Europe

• Germany
• UK
• France
• Italy
• Russia
• Rest of Europe

Asia Pacific

• Japan
• China
• India
• Australia
• South Korea
• South East Asia
• Rest of Asia Pacific

Latin America

• Brazil
• Mexico
• Rest of Latin America

MEA

• GCC
• South Africa
• Rest of MEA

For more information about this report visit

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