xReality wins first European defence deal with Sweden

xReality Group has secured its first European defence contract with a customer in the Swedish Armed Forces in a deal worth about AUD $450,000.

The Australian company will supply its Operator XR OP-2 virtual reality tactical training system through Swedish distribution partner Promoteq. The contract covers software licences, integrated training hardware for use-of-force and tactical training scenarios, and maintenance and remote software support.

Delivery is scheduled for the fourth quarter of XRG's 2026 financial year, with 30% of the contract value to be invoiced on signing.

European entry

The agreement is XRG's first sale in Europe and its first deployment with the armed forces of a NATO member. It expands the company's defence training business beyond North America and the Asia-Pacific region.

Sweden has become a closely watched defence market as military spending rises following its accession to NATO. Its 2026 defence budget rose 18% year on year to 2.8% of GDP, with a stated target of 3.5% by 2030.

XRG said immersive simulation is a recognised priority in Sweden's military modernisation efforts and plans to use the contract as a reference point for broader sales development across European NATO markets.

Local support

Promoteq supplies equipment to defence, law enforcement and emergency services organisations across the Nordic region. Under the arrangement, it will provide local sales, integration and after-sales support for the OP-2 platform in Sweden.

While modest in value compared with some of XRG's other recently announced deals, the contract is strategically important as the company's entry into Europe. It gives the business an initial foothold in a region where defence procurement budgets are rising and armed forces are reviewing training methods.

XRG's Operator XR unit develops virtual reality systems that allow military and security personnel to train with their own weapons in simulated environments. The OP-2 system supplied under the Swedish order is being configured to meet the customer's tactical training requirements.

Training platform

Ben Smith, Chief Commercial Officer, xReality Group, described the contract as a milestone for the business.

"Securing our first European customer is a significant commercial milestone for Operator XR. Sweden is one of NATO's most capable and fastest-growing defence markets, and entering it through a customer within the Swedish Armed Forces reinforces our position as a global supplier of mission-critical immersive training capability. Working with our Swedish distribution partner Promoteq, this contract establishes a foundation we expect to build on across the broader European market over time," said Smith.

Promoteq said it chose Operator XR for its advanced virtual reality tactical training offering.

"We selected Operator XR as our partner for advanced VR tactical training because the OP-2 platform delivers a level of realism, portability and operational fidelity that meets the demanding standards of Swedish defence end-users. Bringing this capability into service in Sweden is an important first step, and we are seeing strong interest from across the Swedish and Nordic defence and law enforcement community in the same capability," said Hedqvist.