With the introduction of new devices, industries are turning to virtual reality to innovate their product development processes. However, before the technology’s possibilities can be fully harnessed, certain constraints must be overcome. This study identifies the benefits and challenges of virtual-reality-based usability testing and design reviews in industry through a patents and articles review. We searched Derwent Innovation, Scopus, and Web of Science and identified 7 patent filings and 20 articles. We discovered an increase in patent filings since 2016 and strong development in the technology space, offering opportunities to enter an area while it is still young. The most frequently researched field is the automotive industry and the most used device is the HTC VIVE head-mounted display, which is frequently paired with motion capture systems and Unity 3D game engines. Virtual reality benefits design reviews and usability testing by providing the visualization of new angles that stimulate novel insights, increasing team engagement, offering more intuitive interactions for non-CAD specialists, saving redesign cost and time, and increasing participants’ safety. The challenges faced by virtual-reality-based prototypes are a lack of realism due to unnatural tactile and visual interactions, latency and registration issues, communication difficulties between teams, and unpleasant symptoms. While these constraints prevent virtual reality from replacing conventional design reviews and usability testing in the near future, it is already a valuable contribution to the industrial product development process.