PUBLISHER: Visiongain | PRODUCT CODE: 1850918
PUBLISHER: Visiongain | PRODUCT CODE: 1850918
The global Defence AR/VR & Simulation market is projected to grow at a CAGR of 5.8% by 2035.
The Defence AR/VR & Simulation Market Report 2025-2035 (Including Impact of U.S. Trade Tariffs): This report will prove invaluable to leading firms striving for new revenue pockets if they wish to better understand the industry and its underlying dynamics. It will be useful for companies that would like to expand into different industries or to expand their existing operations in a new region.
Soldier-Centric Augmentation and the IVAS Successor Wave
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.
What Questions Should You Ask before Buying a Market Research Report?
You need to discover how this will impact the global defence AR/VR & simulation market today, and over the next 10 years:
Segments Covered in the Report
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:
The report also includes profiles and for some of the leading companies in the Global Defence AR/VR & Simulation Market, 2025 to 2035, with a focus on this segment of these companies' operations.
Overall world revenue for Global Defence AR/VR & Simulation Market, 2025 to 2035 in terms of value the market will surpass US$10,500.8 million in 2025, our work calculates. We predict strong revenue growth through to 2035. Our work identifies which organizations hold the greatest potential. Discover their capabilities, progress, and commercial prospects, helping you stay ahead.