Types of Virtual Reality & Use Cases in 2025

The virtual reality (VR) market has grown significantly, increasing from $6 billion in 2020 to $21 billion in 2025. The COVID-19 pandemic had a notable impact on VR usage, with 71% of users reporting they spent more time using VR during that period. ¹

Businesses have also accelerated their adoption of VR technologies. 1 in 2 companies actively integrate VR into their business strategies, emphasizing its enterprise potential.²

What is Virtuality Reality (VR)?

Virtual Reality (VR) refers to the usage of computer technology to create three-dimensional (3D) artificial environments that users can explore and interact with. With the help of special equipment, such as headsets, VR technology allows users to be immersed in virtual experiences instead of a flat-screen digital experience.

How Does VR Technology Work? Components and Processes

Virtual reality systems work by simulating as many senses as possible to trick the human brain into perceiving the virtual environment as reality. To accomplish this, special hardware components are used, such as:

• Head-mounted displays (HMDs) are worn on the head and provide a 3D view of the virtual world. HMDs provide a realistic visual experience by delivering a field of view and a frame rate that resembles human vision.

• Headphones with spatial audio provide an audio landscape that matches the visuals from HMD and mimic an audio landscape that you would expect in a similar real environment.
• Gyroscopes, accelerometers, and magnetometers for head and motion tracking that adjust the virtual environment according to the position of the user within the room and direction of the head.
• Controllers, gloves, treadmills, and other equipment to engage with the virtual environment and to simulate other senses such as touch.

What are the types of VR?

There are five primary types of VR:

• Fully immersive VR is the type that provides the most realistic virtual experience. It involves head-mounted displays (HMDs), headphones, and other equipment to simulate as many senses as possible and to establish a realistic experience. In fully immersive VR, users are completely isolated from their physical surroundings.
  • Gaming: Oculus Quest, HTC Vive, and PlayStation VR for immersive games like Beat Saber or Half-Life: Alyx.
  • Training: Military and medical simulations for combat or surgical training.
  • Virtual Tours: 360-degree real estate tours using VR headsets.
• Semi-immersive VR allows users to experience virtual environments while remaining connected to their physical surroundings. In this sense, semi-immersive VR provides a partial virtual experience. The video below demonstrates an example of semi-immersive VR in pilot training where the control panel is real while windows displaying virtual content.
  • Simulators: Flight simulators for pilot training or driving simulators for training drivers.
  • Education: Virtual lab experiments for physics or biology. Several examples are included in our article on digital transformation in education.
  • Entertainment: Theme park rides with VR projections.

• Non-immersive VR refers to the type of VR that provides computer-generated environments without the feel of immersion. Video games are common examples of non-immersive virtual reality.
  • Gaming: PC games like The Sims or World of Warcraft.
  • Education: Desktop-based learning simulations for chemistry experiments or architectural design.
  • Business: CAD software for product design.
• Augmented Virtuality (AV) blends physical and virtual environments but leans more heavily toward the virtual side. It incorporates elements of the physical world, such as objects or gestures, into the virtual environment.
  • Virtual Meetings: Incorporating physical documents into virtual office spaces.
  • Training: Surgery simulators where real-world tools interact with virtual models.
  • Gaming: Games that integrate physical props, such as a steering wheel, into the VR experience.
• Collaborative VR enables multiple users to interact and collaborate in the same virtual environment, often in real time. Users are represented by avatars, making it ideal for social interaction and teamwork.
  • Social Platforms: VRChat, AltspaceVR, and Meta Horizon Worlds for virtual socializing.
  • Workspaces: Virtual meeting tools like Spatial or Engage.
  • Education: Collaborative VR classrooms where students can learn together virtually.

Virtual reality (VR) vs. augmented reality (AR)

Both VR and Augmented reality (AR) are a spectrum of Extended Reality(XR). These technologies are closely related but there is a key difference. As the name suggests, AR augments the real-world experience by projecting digital elements on it. VR, on the other hand, creates a completely virtual environment that replaces reality.

Since VR provides a more immersive experience, it often requires special equipment and high-end computers while AR can be accessed with smartphones or tablets. However, there are some cheaper options for VR experience such as Google’s Cardboard.

See the top use cases of XR/AR with examples.

Top VR Use Cases

Apart from its usage in gaming, applications of VR have impacts in a wide range of industries including:

Healthcare

Virtual reality is used in medical training and allows students to practice surgeries and other procedures without risking human lives. ³ Moreover, VR systems are also used in patient care such as treating patients with post traumatic stress disorder (PTSD); a treatment was created by a team in Cardiff University to help individuals with PTSD to overcome avoidance, by walking towards a traumatic scene on a treadmill. The team claims that candidates experimented an average improvement in their symptoms of 37%.⁴

Education

VR systems can be used to help students better engage with the subject. It can enable virtual field trips to historical locations or learning-by-doing for applied sciences. For instance, Google Arts and Culture Expeditions enable users to take virtual trips to various destinations. VR technology can also improve distance learning which is even more relevant due to the pandemic.

Automotive

VR allows automobile manufacturers to design and test vehicles before expensive prototyping.⁵ The global VR and AR market is predicted to reach around 454 million by 2030 with a CAGR of 40.7% between 2020-2030.⁶

Retail

Virtual fitting rooms that allow customers to try clothes, shoes, eyeglasses, or even new haircuts can replace physical ones. After the COVID pandemic, virtual samplings have increased 32% and the AR/VR market in retail is expected to reach $18 billion by 2028.⁷

Real estate

VR allows homebuyers to visit properties through virtual tours from their homes. Compared with photos or videos of the property, virtual tours can give a better sense of the dimensions and other features of the property without physically visiting it. This can save buyers, sellers, and real estate agents a lot of time and effort. Here’s an example virtual property tour:

What are the challenges to VR?

• Health problems: As we mentioned earlier, VR systems work by making human brains believe that the virtual environment is the reality. However, when you move in a virtual environment while your body stands still, you can get disoriented which can cause nausea, headaches, and drowsiness. This is called motion sickness. VR treadmills can help with motion sickness by simulating walking.
• High cost: VR headsets and computers with required specifications can get quite pricey. Moreover, VR development can also be expensive since it requires companies to hire developers that are specialized in VR applications. However, VR can be cost-effective in the long run.

Further Reading

• AI Applications & Use Cases of AR
• XR/AR in Manufacturing
• XR/AR in Retail

External Links

• 1. Coronavirus impact on VR usage U.S. 2020| Statista. Statista
• 2. 90+ Powerful Virtual Reality Statistics to Know in 2025.
• 3. Virtual reality and the transformation of medical education - PMC .
• 4. Virtual reality PTSD treatment has 'big impact' for veterans. BBC News
• 5. THE FUTURE IN VIRTUAL REALITY | Land Rover Media Newsroom. Land Rover Media Newsroom
• 6. Augmented and Virtual Reality (AR & VR) Market to reach USD 454.73 Billion by 2030 with a CAGR of 40.7% | Valuates Reports.
• 7. $17.86Bn Virtual Reality and Augmented Reality in Retail. The Insight Partners