Virtual- and augmented-reality headsets haven't had much traction in the consumer market, but they're finding a place on the battlefield. The US Army said Thursday that it has awarded Microsoft a $480 million contract to supply its HoloLens headsets to soldiers.

The Microsoft HoloLens head-mounted displays use augmented reality, which means viewers can see virtual imagery superimposed over the real-world scenery in front of them. Microsoft says the technology will provide troops with better information to make decisions.

The Redmond, Washington, company says the new work extends its longstanding relationship with the Department of Defense. Military bidding documents say the technology will be used for both training and fighting, bringing more situational awareness to troops to help them become more lethal and mobile. The programme is said to "increase lethality by enhancing the ability to detect, decide, and engage before the enemy."

Bloomberg, which earlier reported the deal, said the contract went through a bidding process with key tech companies including Magic Leap participating in the auction. The report added that the contract could eventually lead to the US Army purchasing over 100,000 headsets.

Earlier this year, Microsoft's HoloLens headset was said to be helping NASA build new spacecraft faster. Engineers at American aerospace company Lockheed Martin are using Microsoft's mixed reality smartglass HoloLens to build NASA's Orion spacecraft designed to transport humans to destinations such as the Moon and eventually Mars, and return them safely back to Earth. Lockheed Martin is the prime contractor building NASA's Orion spaceship.

Written with agency inputs