At a training facility in Finland, pilots sit inside full-scale cockpit replicas while wearing XR headsets that overlay a fully simulated environment beyond the physical frame.
The switches, dials, and controls are real, but everything outside the cockpit window is virtual – from weather systems to terrain and other aircraft.
The result is a hybrid training environment that blends physical hardware with digital simulation, allowing trainees to rehearse complex scenarios repeatedly and safely.
For Varjo, the Finnish company behind the headsets used in these environments, this is where XR is finding its most immediate and practical uses.
“Enterprise XR adoption is fragmented, but training – particularly in the military – is where we see real traction,” says Patrick Wyatt, Varjo’s Product Officer.
Moving from Consumer Hype to Industrial Use Case
Extended reality, which includes virtual reality and mixed reality systems, has long been associated with consumer gaming and enterprise collaboration experiments.
But over the past few years, its most consistent adoption has come from training-heavy industries – particularly aviation, defence, and emergency response.
This shift mirrors broader industry patterns.
Companies like Microsoft, through its HoloLens programme, have focused heavily on defence and industrial applications, including battlefield awareness systems and maintenance training.
Meanwhile headset makers such as HTC have targeted enterprise simulation environments, including manufacturing training and aerospace and aviation simulation use cases within broader XR training systems.
But it is defence simulation – historically dominated by large physical simulator domes costing tens of millions of dollars – where XR is increasingly being positioned as a lower-cost alternative.
Traditional full-flight simulators used in aviation training can cost upwards of $10–20 million per unit, require dedicated facilities, and are limited in how quickly scenarios can be modified.
XR systems aim to reduce both cost and complexity by shifting much of that simulation into software.
Inside Varjo’s Approach to Mixed Reality Training
Varjo’s systems sit at the high-end of the XR market, designed specifically for industrial and defence applications rather than consumer use.
In practice, their headsets are used to merge real-world physical environments – such as cockpits – with simulated external visuals rendered in real time. The aim is not just immersion, but fidelity: ensuring that what pilots see closely matches what they would experience in real-world conditions.
“The most advanced customers are creating complex blends of real and virtual environments,” Wyatt explains.
“They might have different systems rendering different parts of the scene, while our headset integrates those elements and tracks the user’s hands.”
This blending of physical and virtual inputs allows training programmes to simulate everything from basic flight procedures to emergency scenarios that would be too dangerous or expensive to replicate in live environments.
Defence as the Primary Growth Market
The company’s technology is primarily deployed in defence contexts, particularly among NATO-aligned countries. According to Wyatt, this includes programmes within the US Army and US Air Force, alongside European defence organisations.
One such example is the US Army’s Reconfigurable Virtual Collective Trainer, which is used for helicopter simulation training across platforms such as Black Hawks, Apaches, and Chinooks.
While XR in defence is not new, its role is expanding as militaries look to reduce costs, increase training frequency, and improve data capture during exercises.
“You can track things like eye movement and reaction times during a session,” Wyatt says. “That gives you data you wouldn’t typically get from a conventional simulator.”
This reflects a broader trend in defence technology – the shift from purely physical training systems to data-rich digital environments that allow for more granular performance analysis.
The Broader Defence Simulation Ecosystem
XR training is ultimately part of a wider ecosystem that includes simulation integrators, defence contractors, and government programmes.
Large defence firms such as Lockheed Martin and Boeing have long developed simulation environments for pilot training and mission rehearsal. Traditionally, these systems have relied on large-scale physical simulators or desktop-based virtual environments.
What is changing is the increasing role of lightweight, headset-based systems that can be deployed more flexibly, without the need for fixed infrastructure.
This is particularly relevant in distributed training environments, where personnel may need to train across multiple locations or outside traditional simulation centres.
Measuring the Impact of XR Training
One of the most frequently cited claims in the XR training sector is that immersive simulation can reduce training time and improve performance – but the strength of that evidence varies significantly depending on the programme.
Data shared by Varjo from a US Air Force Defense Innovation Unit programme suggests measurable improvements in pilot training outcomes.
In one trial, trainees reached solo flight 50 percent faster than peers using non-immersive methods. The same programme reported performance improvements across 33 out of 40 manoeuvres, alongside an estimated $350 million in potential annual cost savings.
While these figures derive from specific testing environments and cannot be applied across the board, the evolving nature of the defence industry (coupled with an expected increase in spending from NATO countries in the coming years) could indicate a growing interest in XR within the military sphere.
Security Constraints Shape Design
But unlike consumer VR systems, XR in defence environments must meet strict security requirements that affect both hardware and software design.
Varjo says its systems are designed to operate without external connectivity, cloud services, or user logins – enabling deployment in secure or air-gapped environments where data cannot leave controlled systems.
“Security is crucial in these contexts,” Wyatt says. “That includes everything from how the software is certified to how the hardware is manufactured.”
This has also influenced manufacturing decisions.
The company produces secure headset lines assembled in Finland, designed to meet procurement requirements for NATO-aligned defence programmes.
XR training systems are rarely standalone deployments however.
Instead, they are integrated into complex simulation environments involving multiple vendors, software layers, and legacy infrastructure.
This creates one of the biggest barriers to wider adoption: integration complexity.
To address this, Varjo has introduced bundled systems that combine headsets, preconfigured computing hardware, and software into a single package designed to reduce setup friction for system integrators.
“The idea is to reduce the integration burden,” Wyatt says. “Instead of assembling different components, integrators can deploy a system that is already configured to work together.”
The Limits of Current Adoption
Despite strong potential, XR training remains unevenly deployed across the defence sector.
Some programmes are fully integrated into operational training pipelines, while others remain in pilot or experimental stages. This creates a fragmented adoption landscape, where outcomes and maturity levels differ widely.
There are also broader questions around established costs, scalability, and long-term effectiveness compared to tired and tested training systems.
As with many emerging technologies in defence procurement, adoption tends to be incremental rather than transformational.
Looking Ahead: Diverging Hardware Paths
The XR industry itself is evolving in two distinct directions.
On one side, consumer devices are moving toward lighter, wearable formats such as smart glasses, aimed at productivity and augmented reality applications. On the other, high-fidelity training systems continue to require more powerful hardware capable of rendering complex, real-time environments.
Wyatt expects this divergence to continue.
“Even five years from now, lighter devices may play a role, but they won’t match the level of detail required for these kinds of training scenarios,” he says.
