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The global simulator market size was valued at USD 16.63 billion in 2022 and is projected to grow from USD 18.07 billion in 2023 to USD 28.78 billion by 2030, registering a CAGR of 6.9% during the forecast period.
The simulator industry is dedicated to the development of simulation technologies along with software applications and services. Simulation systems are virtual environments that replicate real-time scenarios, enabling users to experience and interact with various situations in a controlled manner. These simulations can cover a wide range of fields including aviation, automotive, military, healthcare, gaming, and training.
Furthermore, the market is driven by the increasing demand for training, skill development, and risk mitigation across various industries. Simulation provides a cost-effective and efficient alternative to traditional training methods and offers opportunities for research, experimentation, and analysis.
COVID-19 Hampered Supply Chain System and Reduced Adoption of Simulations in Various Sectors
In the civil aviation training and simulation solutions, the impact of the COVID-19 pandemic began at the end of the fourth quarter. In 2020, some training centers were temporarily closed, reducing the use of networked simulation systems. In the healthcare sector, customers remain focused on managing the immediate operational needs of this medical crisis, resulting in reduced budgets available for normal operations and training projects.
Many key players of simulators took major steps to mitigate the COVID-19 impact. For instance, major OEMs announced a series of flexible measures to protect their financial position in response to the COVID-19 pandemic. The measures also included layoff of almost 20% of their employees.
Furthermore, in June 2020, the COVID-19 pandemic had delayed the installation of an underground mining simulation at the Cape Breton Miners Museum. The project was originally planned for 2019, but was postponed due to budget overruns. The museum initially had USD 1.5 million in funding, but it ended up costing over USD 2 million. The product was planned to open in March 2020.
Additionally, as facilities began to reopen, companies shifted their focus to distance learning. Various companies delivered new distance learning solutions. Hence, the demand for on-site training at universities and hospitals decreased, which hampered the overall market.
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Recent Developments in Quantum Algorithm Enabling Simulation of Complex Systems to be Prominent Market Trends
Whether it’s forecasting weather, traffic patterns, or financial markets, complex systems are crucial to the daily lives of consumers. The process of collecting and recording a great amount of data from far-off events and using that data to make informed judgments and statistical models create enormous difficulties. A developed quantum algorithm constructs the approach of a molecule considering all atomic interactions based on machine learning methods without any potentially unnecessary simplifications.
Quantum simulations are known to be superior to classical simulation systems as they use quantum algorithms for traversing graphs, constructing NAND trees, locating marked nodes in graphs, resolving optimization issues, minimizing errors to forecast fault-tolerating models, and anticipating missing connections in a system.
In March 2023, Intel released version 1.0 of the Intel Quantum Software Development Kit (SDK). The SDK is a full-fledged quantum computer used for simulation and can also interface with Intel's quantum hardware, such as Intel's Horse Ridge II controller chip and Quantum Spin Qubit chip, due to be available this year. In June 2023, Rolls-Royce partnered with Nvidia and the Israeli startup Classiq to investigate how they may scale up their quantum circuit jet engine operations for Computational Fluid Dynamics (CFD). Also, in May 2023, Rolls-Royce announced that it tested a 39-qubit quantum CFD circuit with a depth of 10 million layers with Nvidia’s quantum simulator, one of the largest simulation testing to date.
Increasing Demand for Training in Military, Aviation, and Navy to Drive Market Growth
A simulator is a device used to experience the best possible virtual imitation of an equipment or a scenario from real life. It has found extensive usage in training new personnel in the military, aviation, and naval industries.
Various major players are focused on developing the projects related to simulation systems owing to their various advantages. For example, in February 2023, the Inter-American Air Forces Academy (IAAFA) incorporated the use of body sensors and virtual reality in its agility training program for students from Latin America. The SV-R simulation systems are being used which allow instructors to create an infinite number of scenarios in a realistic training environment.
Moreover, the constant development of various advanced technologies has been a key driver of the market. The introduction of advanced technologies, such as virtual reality, which uses stereoscopic lenses and other equipment to provide a fully immersive experience, has also boosted the simulator market growth.
For instance, in April 2023, General Dynamics Corporation’s IT Services announced that the firm booked a potential 12-year, USD 1.7 billion deal with the U.S. Army for the modernization of virtual flight simulation devices used in training. The company will continue to support the Army’s main rotary wing training program.
Modernization in Technology with AR, VR, and Ergonomics to Drive Market Growth
Augmented Reality (AR) and Virtual Reality (VR) are two technologies, which have begun to pick up pace since the beginning of the decade, and have found applications in multiple industries across the globe.
AR and VR are proving extremely efficient in training new pilots and military recruits in difficult scenarios, without actually causing any harm or endangering their lives. Aside from training and other industrial applications, the technologies are also being incorporated into the day-to-day lives of people to improve their quality of life.
For instance, in June 2023, Apple Inc. launched the Vision Pro, its first mixed reality headset. The headset combines the features of both VR and AR to provide the users with a deeply immersive simulation in their day-to-day life.
In April 2023, Kopin Corporation announced that it received USD 4.4 million contract from General Dynamics Land Systems. The contract involved supply of display systems, which further cemented Kopin Corporation’s position in the growing AR and VR markets.
Continuous Upgrading of Simulations in New Aircraft Models Poses Major Challenge to Market Growth
The rapid developments in aviation industry and changes in aircraft pose a big challenge for the market. A simulation system is customized according to a specific equipment, or a specific area of scenarios. In case of upgrading an aircraft’s equipment or functioning, simulation systems need to be updated or new simulation systems need to be developed to match the latest development.
Hence, requirement of higher capital investment and skilled resources pose a major challenge for upgrading or production of new simulator systems. New scenarios need to be designed according to the new metrics after upgrading an aircraft. This leads to wastage of time while reconfiguring the new simulation systems, which could have been utilized toward accelerating the research. In March 2023, Finnish power company Teollisuuden Voima Oyj (TVO) awarded a contract to GSE Systems Inc., a U.S.-based company, for upgrading the training simulation systems for units 1 and 2 of the Olkiluoto nuclear power plant.
Simulators to be Widely Used in Aerospace & Defense Sector for Training, Testing and Applications
Based on end use industry, the market is segmented into aerospace & defense, automotive, marine & naval, and media & entertainment. The aerospace & defense segment dominated the market and might record the highest CARG during the analysis period. Simulation devices used in the aerospace & defense industry are valuable tools that enhance the training efficiency, effectiveness, and safety. With continuous advancements in simulation technology, these systems continue to play a crucial role in the advancement of aerospace and defense capabilities.
The automotive segment is anticipated to show significant growth during the forecast period. Simulations used in the automotive sector enable researchers to conduct controlled experiments and collect data on factors, such as reaction times and driver workload. The findings from these studies contribute to the development of Advanced Driver-Assistance Systems (ADAS) and autonomous vehicle technologies. It also provides cost efficient means of evaluating vehicle designs, training drivers, and conducting research.
Increasing Number of New Recruits in Marine, Automotive, and Aerospace Domains to Boost Product Use in Training
By application, the market is segmented into training, research & development, and others. The training segment held a dominant simulator market share in 2022. The segment will also record the highest CAGR during forecast period. Simulation applications for training are specialized tools that provide realistic and immersive environments for individuals to practice and develop their skills in a controlled setting. Simulation systems replicate the scenarios and allows trainees to experience and interact with simulated situations.
The research & development segment is projected to grow significantly during the study period. Simulation devices in the research & development domain are used to explore, analyze, and innovate across various scientific and technological domains. These simulation technologies facilitate the investigation and experimentation of complex systems, phenomena, and processes in a virtual or simulated environment, providing valuable insights and data.
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Full Flight Simulation to be Widely Used Due to Wider Applications in Aerospace, Automotive, and Energy Sectors
In terms of type, the market is segmented into full flight simulation, fixed base simulation, driving simulation, and others. The full flight simulation segment is expected to dominate the market during the forecast period. The segment is also anticipated to be the fastest growing segment during the study period. Full Flight Simulation (FFS) is a type of device which replicates a specific type or model, and series of a specific aircraft cockpit. It is an advanced training tool used in aviation to simulate the experience of flying an aircraft.
North America Simulator Market Size, 2022 (USD billion)
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In terms of region, the market is analyzed across North America, Europe, Asia Pacific, and the Rest of the World. North America dominated the market and was valued at USD 6.05 billion in 2022. The increase in technological advancements in the simulation industry is anticipated to fuel the market growth in North America. For instance, in May 2023, General Dynamics awarded CAE a contract to provide a simulation solution for the U.S. Army's Flight School Training Support Service (FSTSS) at Fort Novosel. The USD 455 million contract is for the development and delivery of new full-flight simulation for military helicopters CH-47F Chinook and UH-60M Blackhawk. In addition to the platform, CAE also provides software constructs that support associated collective training devices.
Europe holds a significant market share due to a notable increase in production capacity and rise in investments by key players for improving the simulation technology for applications such as training, research & development, and others.
Asia Pacific is predicted to be the fastest growing region in the global market due to the growth in the aviation industry of countries, such as China and India, leading to higher demand for simulation systems. For instance, in February 2023, Gen24 Flybiz, an Indian flight training company, selected Avion to supply eight Airbus A320 full flight simulation systems. This agreement was released after Gen24 Flybiz acquired Netherlands-based Avion Group and Avion Simulation.
The rest of the world market is expected to witness substantial growth during the forecast period. The strong demand for advanced simulation equipment and services in region, such as the Middle east & Africa and South America will accelerate the market growth.
Leading Companies to Adopt Advanced Technologies for Higher Processing Capacity
The global market has a vast presence of various key companies, such as BAE Systems Plc, the Boeing Company, CAE Inc., cre8tive rooms, Indra Sistemas, Konsgberg Group, and many others. These players are focusing on providing technologically advanced integrated simulation services and products for various sectors, such as marine, naval, automotive, aerospace & defense, media & entertainment, and others. In April 2023, Singapore-based startup EvFly, which plans to operate the eVTOL aircraft, announced that it will be involved in developing flight training technology for the eVTOL aircraft through a partnership with Germany's Future Aviation Simulation Technologies (FAST Group). Under a recently signed Memorandum of Understanding (MoU), the two companies had announced that they would cooperate in the production of a mixed reality training device and full motion simulation solutions suitable for training pilots to operate multiple types of eVTOL.
An Infographic Representation of Simulator Market
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The research report provides a detailed analysis of the market. It comprises all major aspects, such as R&D capabilities and increased demand for simulation services. Moreover, it offers insights into the latest market trends and highlights key industry developments as well as the market size. In addition to the above-mentioned factors, the report focuses on several factors that have accelerated the global market growth in recent years.
CAGR of 6.9% from 2023 to 2030
Value (USD Billion)
By End Use Industry, Application, Type, and Geography
By End Use Industry
As per a study by Fortune Business Insights, the market size was USD 16.63 billion in 2022.
The market is likely to record a CAGR of 6.9% over the forecast period of 2023-2030.
The training segment is expected to lead the market due to the growing demand for simulation training solutions and contracts.
The market size in Canada stood at USD 2.89 billion in 2022.
Increasing demand for training applications in the military, aviation, and naval sectors will drive the product demand.
Some of the top players in the market are BAE Systems Plc, The Boeing Company, CAE Inc., cre8tive rooms (U.K.), Indra Sistemas (Spain), and others.
Canada dominated the market in terms of growth in 2022.
Continuous upgrading of simulation systems for new aircraft models will pose a major challenge to the market growth.
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