Hammy, to agree with Graham and to explain a bit more:

The multi-channel inputs on the receiver will merely pass whatever is fed to them. It's a purely analog connection: the digital-to-analog and surround decoding is done in the player. The receiver is seeing no digital signal at all. That explains the loss of the indication.

Is it better or worse? Most likely, it will sound the same, the only difference being you have less signal-manipulating ability. Your control is dependent upon the player's controls.

As for the game connections, it depends on the game console, so you'll have to see what it needs.

Larry
www.fineelectricco.com