Military Simulation & Virtual Training Market

Market Overview

The global military simulation & virtual training market revenue was valued at USD 12.76 billion in 2021 and is predicted to reach USD 18.72 billion by 2030, increasing at a CAGR of 4.35% from 2022 to 2030. North America leads in military simulation and virtual training, driven by policies ensuring troops' readiness and technological advancements like the U.S. Air Force's focus on reducing pilot flight hours. Asia-Pacific experiences the highest GDP per capita growth, with increased military spending in countries like China and India fueling demand for cost-effective training solutions. The region's procurement and upgrading of military equipment, alongside government programs such as China's J-15 and J-31 simulators and India's Rafale training programs, are driving the market's growth.

The goal of military simulation and virtual training is to create a realistic battlefield experience without the use of live weapons or soldiers. As a cost-effective alternative to traditional training methods for military personnel, military simulation and training solutions are widely used by armed forces around the globe. When it comes to military simulation and virtual training, high-tech platforms are used to give military members realistic operating capabilities.

The worldwide military simulation and virtual training market is mostly driven by military platform purchase initiatives performed by many armed services throughout the world. In addition, military are using simulation-based training approaches to ensure safety, save operational expenses, and reduce the wear and tear on machinery that comes with real-time training. The demand for low-cost simulators with sophisticated artificial intelligence (AI) is likely to rise over the forecast period due to a number of defence ministries throughout the world trying to increase the cost efficiency of operations. As a result, the development of military training simulators has grown more inexpensive, which has led to the creation of homeland security and border patrol simulators.

Market Dynamics

Market Drivers

Military Budgets Are Being Raised

Recent years have seen a dramatic increase in global defense spending. Global military spending reached nearly $1,990 billion in 2021, up 2.8% from the previous year, said the Stockholm International Peace Research Institute (SIPRI). Many countries are constantly boosting their defense spending to buy and produce advanced security solutions in order to combat the rising threat of wars and other internal problems. In 2021, 2.9% of the world's GDP will be devoted to military expenditures. Thus, a rise in military spending around the world has led to an increase in the use of simulation and virtual training technology.

Since weapons and attacking capabilities have advanced around the world, governments are looking to upgrade their defense systems in order to be prepared for any new threats and attacks from other countries. With the help of simulation and training technologies, military forces around the world are able better operate and execute their activities. Because of this, the military simulation and virtual training market's growth is likely to pick up steam in the years ahead.

A Willingness to Accept Virtual Pilot Training in Order to Assure Safety

Because of safety concerns, virtual pilot training has been implemented. There are numerous advantages to virtual flight training, such as effective training with a real-time perspective, minimal impact on the environment, and cost effectiveness. Virtual flight training has lately gained popularity. Full flight simulators are used for most aircraft orientation and training. As a result of using simulation-based training, both pilots and instructors benefit from a safer and more realistic learning environment. Training pilots on an Aeroplan is 22 times more expensive. Simulators, on the other hand, may run for over 20 hours a day with low carbon emissions. Equipment-use training, including computer-based battlefield training, is a common practice in the air force.

A large number of flight training exercises have been replaced by simulation training and embraced by crews. Increased mishaps involving fighter jets are driving up demand for simulator training as a way to assure safer flying.

Rising aircraft production cost

The increase in the military simulation and virtual training sector is being driven by rising aircraft production costs and a focus on cutting flight time at a reduced cost. As there is a greater need for qualified troops and as existing military infrastructure is updated, military simulation and virtual training systems are gaining popularity. Additionally, a rising emphasis on less-priced and more powerful military solutions drives the industry. The military simulation and virtual training market are anticipated to grow over the forecast period as defense ministries increasingly rely on virtual training and simulation games that leverage artificial intelligence (A.I.), big data, and cloud data.

The global increase in territorial disputes

Many countries have seen a rise in the likelihood of wars and conflicts in recent years. Afghanistan has been in constant anarchy since the recent political unrest there in August 2021. Additionally, it is anticipated that the country's increase in violent conflicts and terrorist acts will worsen the situation in surrounding countries. Additionally, numerous wars and smaller-scale conflicts are happening worldwide, most in the Middle East, Northwest Asia, and sub-Saharan Africa. As a result, countries all over the world are investing in simulation and training technology to prepare their armed forces for potential dangers in the future. Thus, it is projected that these factors will contribute to the growth of the global small arms market during the forecast period.

Market Restraints

Approvals From Stringent Regulatory Agencies

The process of developing new products for the simulators market is a time-consuming one because it takes a considerable amount of effort and time to create a replica of any aircraft that is evaluated. To construct a reproduction of an aircraft, developers of flight simulators need approval from original equipment manufacturers (OEMs), which adds to the amount of time and money spent on development. In addition to this, manufacturers have a responsibility to produce goods that are centered on the demands of customers and are flexible and adaptive to meet those needs, while also enabling customers to deal with the dynamic nature of the pilot training environment. They are also expected to cope with safety and regulatory management difficulties, which makes it difficult for them to produce necessary simulators on time.

High Operating cost

The high expense of training is hampering the market's expansion. Simulators come with high operational costs and an increase in the cost of installing simulation software. These simulators also need a dedicated location, qualified staff, and infrastructure. This significantly raises the overall cost of putting simulations into practice. Given their sophistication, military simulators are costly. Additionally, virtual private networks (VPNs) and networking infrastructure, as well as numerous auxiliary goods like T.V. displays and controlling apparatus, are needed for military simulators. The entire cost of operating is rising as a result of these considerations.

Market Opportunities

Drone Simulators Expected to See a Rise in Investment as The Military Adopts UAVs

Several major countries, including the United States, Russia, Saudi Arabia, and China, are spending heavily in unmanned aerial vehicles (UAVs), which are likely to explode in military use in the coming years. Some of the biggest names in the military UAV industry are already in the simulator business, such as BAE Systems, Thales, Elbit, SAAB and the Lockheed Martin, Boeing and Northrop Grumman groups. It is estimated that the military will spend $98 billion over the next 10 years obtaining new intelligence gathering and striking capabilities. Simulation of unmanned aerial vehicles (UAVs) aims to teach pilots (or operators) how to fly or operate an unmanned aircraft from a ground control station. This will put forth new growth opportunities for the global Military Simulation & Virtual Training Market.

Regional Analysis

The Global Military Simulation & Virtual Training Market is segmented by geography into North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa.

In 2021, North America was the most popular region. Due to North American countries' policy of maintaining their army troops ready for deployment in war-like conditions at a moment's notice, these solutions have been mandated to be procured. The U.S. Air Force is working to cut the number of hours pilots spend in the air to save both money and resources. Live Training Transformation (LT2) systems, F-35 aircraft simulators and US Air Force F-16 Training Systems are just a few examples of the programmes they have developed.

In addition, North America is predicted to lead the military simulation and virtual training market in the next years after holding the leading market share in 2021. The U.S. Navy's expansion of autonomous and unmanned ships, submarines, and planes is a major factor in this rise. As a result, the U.S. Navy’s Sea fleet grew from about 290 ships to over 350 ships. As a result, North American countries like Canada and the United States will account for practically all regional military spending during the forecast period as well. Because of this, the market for military simulation and virtual training software is likely to grow.

From 2022 to 2030, Asia-Pacific saw the highest growth rate in terms of GDP per capita. China and India have expanded their military spending, which has helped to fund the purchase of these weapons systems. A focus on providing cost-effective and high-quality training for the military is also likely to drive demand in the region. For example, India's Rafale training programmes, China' j-15s and j-13s, the Sea 1000 programme, and the Australian Helicopter Aircrew Training System (HATS) are just a few of the important programmes that have been implemented by countries throughout the world.

Procurement and upgrading of military equipment drive the majority of military budget spending across the Asian Pacific area. Consequently, the need for military simulators and virtual training systems grew exponentially as a result. As an example, the military expenditure in Asia and Oceania has climbed from USD 340.05 billion in 2010 to USD 470 billion in 2021. Additionally, military spending in the Middle East and Africa (including Iraq) went from 180.82 billion dollars in 2010 to 221.23 billion dollars in 2021. Other government-run programmes, like China's J-15 and J-31 simulators, India's fifth-generation aircraft simulators and Rafale simulators deal, Australia's Helicopter Aircrew Training System programme, and China's Sea 1000 future submarine simulators, are expected to bode well for the market's growth, too.

Segmental Analysis

The Global Military Simulation & Virtual Training Market is divided into different segments according to the Platform Type, Application.

By Platform Type, the Global Market is segmented into Flight, Vehicle, Battlefield, and Virtual Boot Camp. Due to increased presence in commercial and military flight training methods, the flight segment became the most dominating in 2021. The exorbitant expense of flying a real plane, the great risk of human lives being lost, and the ever-increasing cost of aircraft construction are just a few of the important elements that have aided the expansion of flight simulator usage around the world.

Over the projected period, the virtual boot camp market is expected to grow at a CAGR of 4.97 percent. Over the forecast period, factors including territorial disputes, external and domestic security concerns, and increased spending in military modernization and related training will all contribute to growth. The Air Force, Navy, and Army all use virtual boot camp simulators to help soldiers acquire important physical fitness routines and subdue drill objectives during boot camp. The simulator also requires fewer instructors, allowing many trainers to focus on other tasks.

By Application, the Global Market is segmented into Ground, Air, and Naval. Due to increased demand for border security and battlefield activities, the air application sector dominates the market and was estimated at USD 4.82 billion in 2021. Over the projection period, the ground application category is expected to grow at a substantial CAGR of 4.45 percent.

Border disputes and natural resource disputes have prompted the military to concentrate on modernizing its own personnel. The requirement for ground-based military simulation and virtual training is predicted to increase, making it the second-largest market. Tanks are an important part of ground warfare, but their usage in training comes at a heavy cost. Furthermore, because of lower training costs and increased accuracy in measuring training objectives, ground-based simulators are becoming more popular.

Recent Developments

• In January 2023, The U.S. Army's Common Tactical Truck Program's first phase was awarded to American Rheinmetall Vehicles and G.M. Defense.
• In January 2023, Finland purchased Spike-guided missiles in a multimillion-euro contract with Rheinmetall.
• In January 2023, New 5G-powered Open Architecture Capabilities are Demonstrated by Northrop Grumman, AT&T, and Fujitsu to Support Joint Force.
• In January 2023, AFRL Intelligence Information Systems to Be Modernized and Advanced by Northrop Grumman.
• In December 2022, Cubic Transportation Systems unveiled a new global engineering facility in the heart of Perth.