How would you set this up.

Hey guys/gals, I want to re set up my home theater setup. I have the following.....

PS4
PC
Denon AV
Samsung TV/breakout box.

Right now I have the PC and PS4 hooked to the AV, hdmi, and the AV to the breakout out box HDMI..But, I'm using it for both my audio and video...so I have ARC enabled.

The PS4 has an optical out and so does the breakout box. What's my new setup here? PS4 optical to AV, Breakout box optical to AV and leave the PC connected to the AV like it is with hdmi and disable ARC?

Am I missing something here?

EDIT: there is no cable box.

Optical may downgrade the audio as it maxes out at 5.1 DTS. What's wrong with the current setup?

Is there a reason not to use HDMI on both the PS4 and PC for both audio & video? The ARC is just to get sound from the TV back to the receiver?

Yeah, why not use HDMI only on the SP4 too?