The Economy of Cyberpunk 2077: A Game of Cautionary Tales (And Bugs) | Economics Explained

this is night city the futuristic metropolis which is home to most of the action taking place in cyberpunk 2077 which has quickly become the most popular pc benchmarking software in 2020 there are a few reasons i wanted to explore the economy of this fictional world for starters i gotta cash in on a subject that's top of google trends it's been a while since i've done a virtual economy i need a way to class my new gaming pc as a business expense and of course it's actually genuinely very interesting part of the appeal of this game was the way that it woven alternative reality in with the themes and events that are taking place in our modern world to build an economy that both feels abstract but also entirely possible the virtual economy then builds the framework of an immersive world that is equally realistic and fanciful the world of cyberpunk 2077 is a cautionary dystopian tale that takes modern economic issues like wealth inequality corporate influence white collar corruption militarization black market dealings and even environmental degradation and then turns those headlines up to a whole new level to let people experience making their way through a world where these problems go unchecked it also goes without saying that this game has made headlines for a host of technical issues that have perhaps continued the theme of shining a light on economic problems in the real world so the economics of cyberpunk 2077 is a great case study for lots of weird and wonderful economic happenings how did the economy of this virtual world get to where it is in the year 2077 what are the key components of night city's economy and a bit of a tangent what business decisions led to the chaos surrounding the game's launch oh and cyberpunk 2077 technically takes part in an independent city state so you know what hey may as well throw it on the economics explained national leaderboard oh and a little disclaimer this video will not have any spoilers relevant to the plot so don't worry for all of you that haven't been able to play the game yet which is basically everybody this episode of economics explained was made possible by our fans on patreon if you would like to gain early access to these videos before they're uploaded to youtube as well as participate in exclusive q a sessions which are now held every saturday at 9 30 eastern standard time please consider supporting our channel at patreon.com economics explained cyberpunk 2077 actually takes place in our own world in a form of alternative history where a few distinct changes in our past led to some very unfortunate results in our future the basic history is that in the late 20th century the cia fbi nsa and the dea all teamed up together to form the gang of four which would go on to wield significant political influence over the united states and therefore the world these organizations were no longer beholden to the government which they served and were able to put figureheads in place to ensure that their operations could be carried out undisturbed this influence culminated in a war on drugs being taken to a level so extreme that it eventuated an all-out conflict in central and south america the governments and cartels on the receiving end of this invasion retaliated by setting off a nuclear weapon in new york city which is the center of world finance taking out these massive stock exchanges caused worldwide panic as no one was able to realize the assets they had held in their company equity what's actually really interesting is that the nasdaq and the new york stock exchange the two largest securities exchanges in new york city and the world are actually totally prepared for this exact scenario the intercontinental exchange is the company that owns the nyse and in their investment prospectus they detail contingencies in place to ensure that ownership records and trading functionality remain in a situation where new york does not for what it's worth these days the main data center that makes these exchanges tick is not in manhattan it's not even in new york city or state it's just across the border in some non-descript warehouse in new jersey nonetheless losing this financial center was obviously a huge blow to the confidence people had in the us economy and this event kicked off a massive collapse that made the great depression look insignificant in comparison now this is actually quite unlikely and while an event like this will cause economic turmoil and for what it's worth it has caused economic turmoil it is something that could be recovered especially with our modern understanding of fiscal stimulus which was something that we lacked back in 1929 although it is hard to predict the alternative pass so who knows what kind of political mismanagement could have accelerated this collapse especially with the gang of four pulling the strings the eventual outcome of this economic downturn was that the united states became effectively a failed state which was reflected in the u.s dollar falling out of favor as the world's reserve currency and being replaced by the euro dollar which was the fictional equivalent of well you know the euro which was controlled by a far more stable region at the time this is a really interesting detail in the game because it shows the potential outcome of the us dollar falling out of grace as the world's reserve currency we have explored this concept a few times on the channel before and i will leave a link in the video description to a few videos that cover this topic in a lot more detail but needless to say that currencies are much more than just tokens of exchange in our modern economies running a country using the currency of another sovereign region or nation is possible but it's far from ideal some nations like vatican city or monaco just use a foreign currency for convenience the expense and difficulty in creating their own currency outweigh the benefits of being able to conduct their own monetary policy then of course there are nations like venezuela that have been forced into adopting the us dollar because their own currency has been made more or less useless through reckless hyperinflation interestingly enough this alternative united states in the year 2077 used a combination of their own currency and euro bucks the closest real world equivalent to this today is argentina where the argentine peso will be used for basic day-to-day transactions but major financial transactions like buying a house or a car or even getting paid will normally be done in us dollars video on argentina coming soon by the way so you know like subscribe comment and all that good stuff anyway this global turmoil festered over the decades and the world saw widespread man-made plagues massive natural disasters tyrannical presidents and ongoing trade and physical wars between world superpowers think 2020 but twice as bad and then repeated every year for 50 years oh and if you think this is just a direct parody of our current predicament remember this video game started development eight years ago and it's based off a board game that came out in 1990 the original name of that board game was cyberpunk 2020 you can't make this stuff up ominous foreshadowing aside this global turmoil created a power vacuum that was quickly filled by the age of mega-corporations there is an interesting theory in economics and political science that power gravitates over time towards more authoritarian institutions with fewer people to answer to of course it is just a theory but especially during times of extreme turbulence an institution like a large corporation is able to seize power a lot more effectively than say a government that is beholden to internal bureaucracy and those pesky checks and balances i have recommended it before but if you haven't already seen it go and watch cgp grey's video called rules for rulers he explains this theory far better than i ever could regardless after years of failing governments gangs controlling the streets and widespread unemployment a host of mega-corporations rose to prominence and became the true powers operating in the united states these corporations controlled everything from basic municipal services all the way up to military and emergency services as well as the net the net is analogous to the internet now modern world but remember this fictional world was originally perceived back in the 1980s so again it's pretty remarkable how much they got right of course the net of cyberpunk 2077 is set far in the future and controlled exclusively by these mega corporations which use it to monitor track and collect information about everybody who uses it everybody from potential customers or corporate rivals all the way up to their own employees are constantly monitored or to drive more sales quash competition and weed out insubordination respectively now i know a world of mega corporations that control everything and monitor our lives 24 7 using the internet pretty hard to imagine right well everything so far might be par for the course but what was a bit different was that one of these companies effectively founded their own sovereign city nation called coronado city this city was founded in modern day california which had also claimed independence from the greater united states this city was built as a haven for trade and business that was meant to be sheltered from the crime and instability that was plaguing the world at the time it was developed by knight international in collaboration with a selection of other megacorporations as an administrative center for corporate executives to live in relative safety almost like the world's biggest gated community of course this idealistic dream did not exactly work out and the city fell into the same kinds of conflicts that were going on everywhere else in the world corporate competition was no longer competing on price it was competing on the battlefield these tensions eventually culminated in the death of richard knight who was the founder and ceo of knight international leading the city to be renamed in his honor purely from an economic perspective night city has many similarities to hong kong they are both special economic regions they are both very business friendly and these similarities extend down to the fact that the head of each respective area is a ceo rather than a mayor or a governor but perhaps the best real world equivalent would be historic european free cities or communes these were medieval cities formed not by government or nobility but rather by a collection of merchants that needed a safe and facilitating area to conduct their business these historic entities tended to develop a de facto set of guidelines based around the fact that everyone was there to do business and violence was bad for that business nevertheless the same kind of corporate conflicts that drove the storyline of cyberpunk also plagued these ancient city-states places like venice genoa and pisa came to be defined for the business they accommodated rather than the governments that ruled them now on the topic of effective leadership we would be remiss if we didn't mention the issues surrounding the game at launch given massive performance problems with the game especially on last generation consoles sony has offered full refunds on all orders done on their virtual store while also removing the game from sale for people that haven't been following this closely this is truly a massive business decision cyberpunk 2077 was easily the largest game release of the year and it was launched just before christmas after several delays had pushed the project back so many times it basically became a meme this decision will see sony give back tens of millions of dollars while also for going millions more in sales that would have been made online in the lead up to christmas morning this is more business than economics of course but perhaps there is still a valuable lesson to be learned most of the blame for these issues has been directed at the game company's executives which pushed out what was obviously an unfinished faulty product to a market to meet quarterly sales targets needed to see them nice fat bonuses this certainly can't be excused by consumers that were not given the product they were promised but there is a little bit more of a foundational issue when working on projects deadlines are important it's all well and good to say we have all the time we need to develop something perfect but perfection is unattainable and the longer a collective project gets drawn out the bigger and more bloated it inevitably becomes various teams want to add this feature and that extra storyline and by the time one component of a swelling project is finished another part needs to be updated it might run contrary to conventional thinking but not many projects involving this many people are made better by taking longer time frames need to be realistic and adhered too this goes for everything in business not just video game development but as i say this i should also apologize to our patrons over on patreon for this preview not been up a full 24 hours early i had to rewrite the script partially to add this chapter here about the game's development issues so if that's not severe hypocritical irony well i don't know what is but anyway now it's time to put night city on the economics explained national leader board and for what it's worth another city state is currently top of the list although of course hong kong does have the disadvantage of being grounded in reality pesky reality is also a problem for creating some of these ranking figures because normally for consistency we use gdp and population figures from the international monetary fund but unfortunately they haven't spent the time capturing these figures for night city yet so we're going to have to work this out ourselves gdp is going to require a bit of reverse engineering and we're going to have to make some assumptions about consumer spending habits 50 years from now the average rent in night city varies wildly from poverty-stricken beggars renting coffin size apartments aptly named coffins for around 200 euro bucks a month all the way up to executive penthouses that rent for at least six times that by taking this and assuming that around one-third of wages are spent on accommodation and applying a high-income genie figure of 0.9 which looks reasonable for a dystopian corporatocracy like night city we can find household income is 5.4 billion euro bucks a month or 65 billion annually when we convert this to us dollars which hovers around two dollars for every one euro dollar in 2077 this gives us an annual household income of 130 billion us dollars which to be honest is actually pretty pathetic if we looked at household incomes to gdp ratios in modern day city states like hong kong and singapore which are roughly one to two this would give night city a gdp of 260 billion dollars which was way less than i was expecting and gives the nation a six out of ten a few things to consider is that given all the turmoil in the world and minimal government intervention inflation is not as strong as it has been in recent decades so these nominal figures are pretty close to what we would have here in 2020 another thing to consider is that a very large portion of night city's business dealings go unreported shall we say if we were to include the black market i have no doubt this figure would be far higher it's also possible given the cramped conditions that people just naturally spend a smaller portion of their paycheck on accommodation which would give us a larger gdp figure now with a population of 6 million people this breakdown would give night city a gdp per capita of 43 000 again given how advanced some of their technology is i was expecting this figure to be far higher but i guess a good portion of the city does live in extreme poverty so it shouldn't be too surprising either way this is in line with modern day nations like germany belgium and canada so it gets an 8 out of 10. stability and confidence is also quite hard to pin if we were to compare it to its peers in 2077 it is a relatively solid beacon of corporate solidarity where business comes before needless destruction but the world in 2077 does not set a high bar for this category and since this list is to compare nations in the modern day we really can't ignore the flagrant corruption criminal activity and acts of corporate violence that are commonplace in night city so it gets a three out of ten growth again this is quite hard to pinpoint but given that this city is five decades into the future and only just going toe-to-toe with its modern day peers it's safe to say that economic growth has not been fantastic it gets a 2 out of 10 because at least the mega corporations look to be getting richer so finally industry well here is where the natural advantage of being set in the future really pays off for night city even the poorest members of this society have access to technologies that are unimaginable to us today cybernetic enhancements as well as an internet that puts what you're looking at right now to shame means that as compared to any other current economy it needs to get a 9 out of 10. only losing out one point because a lot of these technological advancements have been used for destructive purposes rather than productive ones altogether it gets an average score of 5.6 out of 10 which is not great and puts it here on our list where it will be taken back off because well maybe i will start an economics explain leaderboard for fictional economies one day but for now it was just having a bit of a laugh playing around with some silly numbers hi guys i hope you enjoyed the latest video if you did please consider liking and subscribing this video is made possible by our patrons over on patreon so if you enjoy this video please consider supporting the channel like these awesome people did thanks guys bye

Channel: Economics Explained

Views: 311,664

Keywords: Cyberpunk 2077, the economy of cyberpunk 2077, night city economy, eurobucks, euro buck, money in cyberpunk 2077, the economy of night city, mega-corporations, cyberpunk delay, cyberpunk review, cyberpunk, economy, wealth, apartment, gdp of cyberpunk, cyberpunk career, national economy, cyberpunk company, launch, cyberpunk bugs, cyberpunk money, sony remove cyberpunk, sony cyberpunk refund, economics, business, finance, stock market, economics explained, cyberpunk 2077 review

Id: 0-uVse_LDSI

Length: 16min 39sec (999 seconds)

Published: Sun Dec 20 2020