Surround Sound Headset into Elite Controller?

Its a conspiracy. MSFT did not release simulated surround sound on purpose. It is a marketing strategy. Turtlebeach and Polk headsets are ready and capable of simulating surround sound as soon as the firmware is released. The Xbox headset will NOT properly
be able to simulate surround sound. So, to boost their sales they made it to their advantage by ensuring NO next gen controller headset has surround sound from the controller. The MSFT headset actually sounds pretty good and is way cheaper then the XO7
and Polk (I bought them all). Think i'm crazy? If you read different posts you will see people saying how they are buying the MSFT headsets since there is no controller surround sound and because they are cheaper.

You're in luck! You don't need a special surround headset, as there now is a new sound format being broadcast to the controllers called "Windows Sonic".

This is a virtual surround format, that allows normal stereo headsets to produce surround sound by delaying and echoing the surround channels in a way, your ear actually hears them from behind, above or wherever.

Since you only have two ears, two speakers can be enough to fool your ears into hearing things from different positions besides only left and right. Your two ears detect the position from a sound by the short echoes and delays each ear hears compared to
the other ear. So instead of having a dedicated speaker in the position from where the sound is coming from and having your ear figure it out that that specific speaker in that position is making the sound, the Windows Sonic format already pre-calculates the
delay from when one ear is supposed to hear a certain sound compared to the other, so your ears are fooled into hearing positional surround sound with "only" a stereo headset.

You should find the setting via Settings -> Display and sound -> Audio output.

The Xbox One controller (regular and elite) only supports stereo for game audio through the 3.5mm jack or the headset adapter.

As far as I know, the best way to get true surround sound is to connect directly to the Xbox's optical-out port. These types of headsets that connect this way are usually wireless, and have a base/transmitter that connects directly to the Xbox console via
optical cable.

Apparently both the XO4 and XO7 are both tuned for stereo and surround sound. But it seems that it's Microsoft who are currently restricting surround sound.

These headsets get the game sound by just connecting to the headset adapter and the controller. No connection to the console is needed. These headsets will accept whatever signal is sent to them from the controller, at the moment, Microsoft is limiting that
to just stereo. If Microsoft update to send surround sound, then these headsets are ready for that.

Hopefully that makes sense

USB headsets won't work. Unless they are simply powered by USB and use optical for the sound.

If you want fully wireless, there are currently only 2 options, the Stealth 500X and the Elite 800X, both from Turtle beach. If you want surround sound, those two also provide that along with the ASTRO A40's with a Mixamp or the ASTRO A50's. Both the ASTRO's
will need to be tethered to the controller for chat.

There are then many options if you're not too fussed about having surround or wireless. Anything that includes some kind of Xbox One Stereo headset adapter will be fine. Anything with a stereo headset adapter will also allow you to chat as well as hear game
sounds. They have a control that balances between chat and game.