Streaming sources are never going to be lossless.  I don’t know if Games could be. Since the track is likely locally stored, it could be lossless, but I highly doubt it.  Also not sure if it matters what console version you’re using.

Also wanted to point out that much of this is highly dependent on your TV (or HD Fury Arcana).  For example, you aren’t getting any lossless audio if your TV isn’t eARC capable.  If your TV doesn’t have ARC, then you’re using optical and the best you’ll get is dolby digital.  Even then, some TVs do not properly pass through that audio.

To add to melvimbe, multichannel PCM sent from a player and received by Sonos will only be lossless if the original source was lossless, such as DTS-HD Master Audio and Dolby True HD.

DTS, DD and DD+ are compressed, lossy codecs and while they may be decoded to uncompressed multichannel PCM, the output will still be lossy.  

Agree with both points and I can edit the original post. Specifically:

• When I mentioned “lossless”, I mean the format of the sound is as good as it can be from Xbox → Sonos Arc.  So for example, Dolby Atmos content on Netflx that gets passed through in the correct format.  But yes, you will likely always lose something when streaming.
• Also yes, the above settings assume that you are using either eARC or HDFury setup (I have the latter)

“lossless” actually means that the audio format is not compressed.  Using the term with a different definition is confusing. Sticking with your example, atmos from netflix will always be in DD+, which is a lossy format.  The stream will not get downgraded between xbox and Arc, but that is not what ‘lossless’ means.

Fair enough -- I’ve edited the post to reflect.

Still interested in everyone’s clarification on the final two rows, as the majority of content falls into those categories.  I end up bouncing around with my Xbox settings and not knowing what the optimal is.  (For example, I suspect that if I leave it at Bitsream → Atmos after watching a UHD with Atmos then it will output empty surround channels for a DD 5.1 source unless I modify it again to be either Bistream → DD or Uncompressed 5.1...would be nice if it auto-selected.)

I disagree with the above statement “‘lossless’ actually means that the audio format is not compressed.”

For instance, in the case of Dolby TrueHD:

https://professional.dolby.com/tv/dolby-truehd/?utm_campaign=cin-truehd&utm_medium=social&utm_source=youtube&utm_content=interview-super8

“Every detail of the original recording is preserved because Dolby TrueHD reproduces audio bit-for-bit identical to the studio master.  Dolby TrueHD accomplishes this using a suite of highly sophisticated compression technologies. These enable 100 percent lossless audio in files half the size of uncompressed pulse-code modulation (PCM). What this means for you is the best possible sound from Blu-ray Discs and streamed or downloaded sources.”

Feel like we’ve lost the original purpose of the thread 

Putting aside lossless vs lossy - trying to understand if the settings above are correct/optimal for each type of source, and by that I mean the best sound output from Arc based on the original source audio -- preserving format where possible.

I asked something similar in this thread, but I didn’t receive any concrete answers.

Games don’t have a fixed soundtrack like a movie. The sound mix is created live from music, sound effects, voices etc as LPCM. So outputting as Dolby or DTS adds additional processing and, hence, lag.

Right now you can simply set 1 audio output for all content. There should be separate settings for separate content:

• Non-Atmos games
• Atmos-games
• Non-Atmos app content
• Atoms app content

Agree - I guess this is more of an Xbox configuration issue than a Sonos issue, i.e. having to go in there and fiddle with settings with each new source.  It’s the equivalent of if you needed to turn HDR on and off instead of the TV being able to automatically adjust.

Not sure I totally understand your comment about games, though.   I would assume that if you are playing something designed with Atmos then the we should pick Atmos.  Are you saying that-- if it doesn’t fall into that category and just outputs as general LPCM-- we should also choose Uncompressed 5.1 in order to not add lag? 

Yes: if you want the least amount of lag, then you should use LPCM with non-Atmos games.

With Atmos games, it’s complicated. Atmos can be sent as Dolby Atmos or Dolby MAT (the Sonos Arc supports both).

• Dolby Atmos is the “compressed” variant and either a Dolby Digital Plus (lossy compression) or Dolby TrueHD (lossless compression) track plus a Dolby Atmos extension. This is what you usually find with movies (streaming, Blu-Ray).
• Dolby MAT is 7.1 LPCM with a Dolby Atmos extension (this is what Apple TV converts all Atmos tracks to before outputting).

Taking a game’s LPCM audio streams, encapsulating them into a Dolby MAT container and adding the Atmos substream should be quite a bit less CPU-intensive than encoding the LPCM streams to Dolby Digital or TrueHD and then adding the Atmos substream. That’s why for games, Dolby MAT is the only really usable option.

Sadly, it seems Microsoft implemented it differently. I don’t know for sure, but because lots of people experience lag with the Dolby Atmos setting, I believe they are not using Dolby MAT.