I am making this thread to summaries all my findings investigating the issue on my end, so perhaps it may serve to help someone experiencing the same issues. The issue has been reported to CDPR's tech support so hopefully they will fix it in the coming updates.
PREMISE: Recently I got back to Cyberpunk 2077 after not playing for about 3-4 months. And when I did I was almost immediately annoyed by flashing blinking and other visual noise artifacts which really detracted from my experience. I was pretty sure I didn't notice them before so some investigation was in order.
The BUG: Or rather the Bugs. I noticed two distinct instances of colorful flashing. One that appeared mainly during rain on reflective surfaces and mostly on NPCs having an umbrella. The second one mainly appeared on light sources and the reflective parts of the vehicles. Here's an example of the first kind:
Now to some it might seem like a dying GPU, and if you are having that sort of issue, rest easy your GPU is fine (probably don't hold me accountable)
Browsing on YouTube I was able to verify that it was indeed not an isolated instance and that it did occur to various degrees of severity on a variety of different configurations. In my instance it was
RTX 2070 ROG non-super which is good for absolutely playable experience at the
RT Ultra preset with DLSS Auto @ 1080p - remember this, this is important.
THE FIX: Now this sort of colorful flashing reminded me of the flashing in the top right corner when the spot crossed a reflective surface which existed in the game since day 1. I found
This thread on Reddit about a user experiencing the top right corner flashing, and somewhere down in the comment suggested turning the setting called
"Color Precision" from High to Medium (the only two available settings). So I tried it and would you have it know it fixed the flashing umbrella NPCs completely with very little graphical fidelity impact. Here's proof:
So if you experience this kind of flashing: Color Precision to Medium
This however left the other kind of flashing, light sources and chrome part of vehicles. I saw this video:
Which linked it directly to DLSS. And sure enough the second I turned off DLSS, the second type of flashing was gone too.
But I've always played with DLSS and I don't remember it being that obnoxious. The first kind of flashing I was sure wasn't in 1.31 so I decided to see if the second one - the DLSS related one isn't there as well. Imagine my horror when I booted 1.31 and saw the second type of DLSS was in 1.31 and exactly the same as in 1.52. I am sure I wasn't going crazy and there is no way I could have played the game like this, so I started thinking what have I changed in my PC between 1.31 and 1.52 and did the following test, look at the lights on the bottom side of the bar:
RUN 1:
RUN 2:
As you can clearly see the settings and game versions are exactly the same, both are loaded from the same save file, so what causes the annoying flickering in RUN 2, compared to RUN 1. It was the GPU driver. Run 1 is done with the earliest nVidia driver that can run Cyberpunk namely 456.71. Run 2 is done with 512.77 which I believe is the second to last version.
I very rarely update my GPU drivers (to be fair things like that only reaffirms why) because I feel like nVidia way too often optimizes for brand new titles breaking things for the old ones, so I update only when absolutely necessary (i.e the game outright says "DUDE NEW DRIVER NOW"), and such update was done between my playthrough of 1.31 and 1.52. So there you have it - not everything is CDPR's fault. nVidia must have changed something in the way DLSS interacts with light sources and the result is seizure inducing.
THE SORT OF FIX: So what if you don't want to play with an antiquated driver, well there is a solution which minimizes the problem and that's updating the DLSS .dll. Originally 1.52 ships with DLSS version 2.3. I believe the latest one is 2.4.3. If you are updating your drivers through GeForce Experience and optimizing the games through there Cyberpunk's DLSS should automatically be updated to the newest working version, but however if you are like me and updating the driver is a dirty thought you have to do it manually.
PLEASE NOTE THAT ANY CHANGES YOU MAKE TO THE GAME FAILES AND DOWNLOADING DLLs OFF THE INTERNET IS ENTIRELY AT YOUR OWN RISK. But yeah doing so in my case reduced the flickering significantly almost to a playable level.
So there you go, I will continue to investigate the issue and post updates as edits to this post, if it helps at least one choom until CDPR fixes things I will be a happy man. See ya around.