XB1X Dolby Atmos "inferior" to other outputs

Since the last update, Dolby Atmos has stopped working and an undefined PCM data stream is being output.
All apps are affected, such as Netflix, Disney, VLC.
Dolby Atmos works with the Xbox sound test program.

Previously, Dolby Atmos had worked without any problems.
All other devices (Blu-ray player, mini PC, FireTV, AndroidTV, etc.) still work perfectly with Atmos on the Denon 4700X.

Is it possible that you set your sound output for headphones to Dolby Atmos and didn't buy the Dolby Atmos App?

If so, you will be able to try Dolby Atmos through Headphones for 14 days, after which it'll stop working.

You need to switch to basic Stereo or Windows Sonic if you want spatial 3D sound without paying for Dolby Atmos.

So after following up with the Dolby Access support team, apparently games aren't supported on home theater, only on headphones:

"Unfortunately, Games encoded with Dolby Atmos audio are not compatible with Dolby Atmos for Home Theater, as they are specifically configured for Dolby Atmos for Headphones. If the content you are experiencing is not compatible with the app you are
using, then audio will cease, or will simply output as regular stereo output.

To clarify, Dolby Atmos for Home Theater is included at no charge with any Dolby Atmos supported hardware, such as a receiver or Xbox One X, and is used to activate Dolby Atmos features via HDMI connection for a Dolby Atmos certified AVR, soundbar,
or TV."

"Unfortunately, the version of Dolby Atmos included with your Xbox is Dolby Atmos for Home Theater, which is not compliant with any gaming content."

It kind of strikes me as hard to believe, or that this won't be addressed, but that's what they're saying for now. That said, it still isn't working for me for Netflix content either, so I'm going continue troubleshooting with them and see what's doable
and what's not. Fingers crossed.

Hey Junkstar,

I split your question from the
thread you originally posted on since it is dated a few months back, and that way we can answer your question directly.

Dolby Atmos for headsets on Xbox One is designed so that all audio is optimized for that headset, which means the audio settings for your Dolby Atmos home audio system doesn't take effect to allow the headset to utilize the audio technology to provide the
best quality of audio for the headsets. By design it doesn't seem like you can use the Dolby Atmos technology for your home surround sound system and your headsets at the same time.

Apologies for any inconvenience this may have caused.

Hello,

I have almost the same issue. I've bought Dolby Atmos for Headphones from Microsoft Store, connect my headset to controller and set audio output to Dolby Atmos in my Audio Settings page. But sometimes it is roll back to Windows Sonic! I've launch Dolby
Access app, check that in settings page selected Dolby Atmos For Headphones, close this app and get back to Audio Settings, change Windows Sonic to Dobly Atmos.