The onkyo would be a step up, its up to you, Perhaps you could find an onkyo 605 for under $250 and that would be a better receiver then the Sony 720. on amazon there is the Sony 920 for $321, that is a smoking deal. Your playstation is going to have to decode the audio anyways, so really its up to you as to prefference and price. Pass through is usually not a good thing because that usually means that the receiver won't touch the audio.
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