I just bought an Xbox One, to see if it can replace my old BD player and Linux media server. I'm posting some problems I encountered here to see how other people deal with them. I set the Xbox audio output to bitstream DTS, and it sounds pretty good for the Wolfenstein game I bought. But for Netflix, when I play a stereo TV show, it still outputs DTS. This means the Xbox is decoding Dolby Digital 2.0 and re-encoding DTS — a lossy process. It would be better to send the stereo signal and let the receiver handle the processing. My Onkyo receiver has a nice Pro Logic II mode that does a decent job of expanding a stereo signal to surround, but it of course doesn't work when the source is DTS.
You will have to manually switch to Stereo uncompressed every time you want to use Pro Logic II on your receiver then switch back to DTS or DD when you want to play games. Xbox One is not able to dynamically switch audio output, unfortunately. This and many other audio issues have already been addressed in this thread.
In other words, the Xbox One has audio, but it is broken in so many ways. It clearly should not be used as a BD Disc Player replacement if you cherish proper bitstreaming out of HD audio to your AVR, which most people do. Also, if you use the HDMI-In port and run TV and Apps through the XB1 expect a lot of channel-mapping errors, and as mentioned PIA switching issues. Best to leave it on Uncompressed 5.1 to PCM audio out (assuming you have it HDMI connected to an AVR) and use other devices for proper audio/video playback. In my opinion the XB1 has way too many issues to be considered an all-in-ONE replacement. If you just need sound, and don't care one lick about what and where sound is coming out of your speakers, then it works. According to Microsoft that's good enough for them.
That's the mistake you made. If you have a capable AVR, the best setting so far is LPCM. The two bitstream options a misleading. They should be labeled as re-encoding instead. There is no true bitstream option for Xbox One yet. (Neither is PS4).
But, there is another bug in Xbox One that if you happen to watch a Netflix movie with 5.1 DD+, you will get surround channels coming out at the wrong speakers if you have a 7.1 set up.
Amazing that a device sold as a "all-in-one" entertainment system has such basic flaws.
I traded it in for a PS4, and this system apparently has similar problems. When I play stereo music with the Music Unlimited app, it outputs 5.1 with silent channels, so the ProLogic doesn't work. I've tried both bitstream and LPCM. I think I'm actually going to buy a PS3 instead.
If neither of consoles suit your needs nor are capable of replacing your BD player and media server, why do you keep insisting on purchasing a gaming console for watching Netflix and media files? You just replaced a powerful console, in terms of features, to a less capable one and now you're thinking about teleporting a decade earlier to, ironically, a more feature rich machine than the one you just got.
Like you said, these are entertainment systems, created as a simple way to plug and play your games, consume media, etc. Therefore, they do not revolve around advanced audio capabilities. Although, I strongly believe that if someone at Microsoft and Sony tried just a little harder, they could definitely solve these audio issues. But my friend, if they're not making mount off of it, they're not interested and they just don't care.
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