I think he's just wanting the simple answer so he can conceptualize the setup and make sure it works. I think the issue for him is he's used to PC gaming audio requiring a sound card because of Creative's dominance (where if a game had much audio setup it was almost certainly using Creative stuff due to that whole mess). But in short, the audio is now software baked into the game versus needing a certain sound card to get the full features that a game offers. Then it's up to the game on what it supports, some might just pass through the audio as LPCM, or maybe encode it to Dolby Digital or something.
I can definitely understand his confusion as Creative made a mess of PC audio, and it frankly still is in that while I think the baseline for games has improved (both via better audio processing baked into Windows and games, and better base hardware on motherboards and outputting to receivers or DACs), we really haven't seen it improve. I'm not sure how many games do some of the stuff that even Aureal was doing 15 years ago. That's not to say it's total crap, but gaming audio just seems to be kinda baseline and aiming for the home theater type of crowd (which I don't like as lot of that is gimmicky stuff). I know AMD tried to do some (TruAudio where they had dedicated blocks for audio processing, which is similar to what Creative's newer cards use where they go with like 4 SIMDs and then its all the software doing the actual processing instead of it being tailored specifically to the processor chip like with the Audigy and X-Fi), but that didn't seem to really take off much. And some companies do put in extra (but seems like most of them then toss that away by trying to integrate Dolby processing stuff which I personally am not a big fan of). But the base level is good enough (and I'd say the artistic aspects of the audio are more important) that it doesn't seem to be a big need.
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