Thanks @LucasCL

  Thanks for the reply @LucasCL, anything you do will be greatly appreciated. I live in the UK, I don't know if that will affect what you can/can't do.

I too would love an offer like this in the EU.

There are a couple of options for getting Chat through optical.   Use a USB microphone. I use a Blue Snowball, and chat sound is sent with other audio through HDMI or optical.   There is an method that some people are using a method outlines by leukoplast in another thread...

For step 3 I would be to run a 3.5mm headphone to 2xRCA cable, from the headphone connection on the Y adapter to the line in on the X7. Salbando would have to confirm if this is how they got it working.

Correct me if I am wrong. You can output chat only through the usb device. The game audio (digital surround) could still be sent through optical.   I do not have an X7 (yet) as I cannot justify the price at the moment, but I assume from this thread you can have surround from the optical source...

  If you were using this method, you could run a cable from the headphone port on the usb device to the line in on the X7 which would allow you to control the chat volume level separately to the game audio, instead of having both chat and game through the same input.

I use a Blue Snowball mic, which I plug in to the USB on my PS4. From what my friends have said my voice comes through well. This mic works well on PC too, I have no idea about XBox.   This is a desktop mic, so will not attach to your headphone.