The PC RGB setting is broken and does not correctly output at Full Color Range when selected.

As of the most recent Xbox 360 and Xbox One updates, the problem is still not fixed.

I have my TV calibrated and configured properly. I have tested it with my both my PS3 and PC set to RGB Full and RGB Limited, and my Wii U (which outputs RGB Limited)

It works perfectly with all 3 devices.

On both the Xbox 360 and Xbox One, however, the output from the both the RGB Full and RGB limited options have 16 levels of black crushing and 16 levels of white crushing when the TV is set to the corresponding mode, and only look normal when the TV is set
to RGB Full, and the Xbox is set to RGB Limited.

I don't have recording equipment, but others have recorded output and tested the black levels in photoshop to verify this issue.

Essentially the problem breaks down as follows:

Black Levels

15-239

- PS RGB Limited option, Wii U, PC RGB Limited output

0-255

- Xbox RGB Limited option, PS RGB Full option, PC RGB Full output

(-16)-271 (values out of range by 16 levels)

- Incorrect Xbox RGB Full option

Crushed blacks usually happen when the source RGB is set to full/nonstandard and the display RGB is set to limited/standard. You sure you don't have a mismatch in your RGB color ranges?

The reason was probably that they didn't care to block that setting, to keep things simple. Remember that when HDMI output was introduced with the Elite, the Xbox 360 only output full range RGB. It wasn't until one of the system updates that they added the
color space settings.

Before they migrated their framework to Silverlight and botched the behavior, YCbCr would pass video material through unconverted as far as I know (aside from the inevitable conversion between BT.601 and BT.709 when needed). Source would switch between RGB
and YCbCr, and Auto would go by the E-EDID data to decide on the color space, usually resulting in behaving like the Source setting.

The problem was that with the Color Space set to Source, the Reference Levels setting became a problem. Some displays expected RGB to be full range and some expected it to be limited range. The Xbox 360 didn't always (or maybe never) indicate the quantization
range correctly in the metadata, and forcing the range on a display to Full or Limited might affect YCbCr input as well - even though YCbCr is implicitly limited range.

As a result, video could become washed out while games looked right, or video look correct but games become murky. Letting everything be output as YCbCr was probably a convenient workaround to make sure everything looked okay, and allow for those without
insight into color space to be given simpler advice as to which settings to pick.

Many displays convert to YCbCr internally for processing though - often with 4:2:2 chroma subsampling. However, they may also perform the RGB to YCbCr conversion at a greater bit depth than the Xbox 360, giving lesser rounding errors.

Now that the Xbox 360 can no longer pass through YCbCr as-is, but converts to RGB and then back to YCbCr, the setting is of course bad even for video output.

Sony took a more tech-savvy approach, but they probably also took greater care to form a properly flagged signal.

The improvement most provably has to do with the YPbPr BT.709 setting forcing the Xbox 360 to recalculate the output to limited range levels (16...235), which many tv's expect. When set to RGB and Expanded, the Xbox 360 outputs levels as full range (0...255),
which causes too high contrast and incorrect midtones unless the tv expects levels to be full range.

.

Normally the source should indicate to the display whether the output is limited range or full range letting it switch to handle either correctly, but the Xbox 360 doesn't indicate it properly because of bad coding.

TV content is authored such that a value of 16 (on a 0-255 scale) represents full black and 235 represents full white (this color span = “RGB Limited”) and assumes the viewer's TV has been calibrated to show full black upon receiving a pixel value of 16
and to show full white upon receiving a value of 235. Xbox One is assumed to be connected to a TV (not a PC monitor), and we make our best efforts to optimize video content (movies, TV shows, content authored specific experience for video levels, i.e. "RGB
Limited"), consistent with CE devices.

Switching to RGB Full will cause loss of visual dynamic range on a properly calibrated TV.

Basically, you should always use the TV (RGB Limited) Color Space display setting on Xbox One. All video content (TV shows, Movies, Blu-ray, DVD, etc.) is authored for (RGB Limited). You’ll actually lose visual dynamic range if you select Color Space = PC
(RGB Full).

The "RGB Limited" setting could be named more accurately.'

Note they have now changed the name to RGB Standard and PC RGB. If you use RGB Standard then 99% of your "crushed black" problems will be gone

For more info:
https://support.xbox.com/en-US/xbox-one/console/adjust-display-settings