PC + Xbox audio setup (1 Viewer)

Firstly I would like to say hello and thank for a great deal of knowledge that can be found on this forum.

I need to find a solution for my desktop sound system. I have got 3 elements: PC, Xbox and PC monitor.
I would like to add that PC has optical out, Xbox has an optical out but the components are hooked up to a CRT TV so I have to use optical out for audio and HDMI for video. The monitor does not have HDMI input so I will need to use some kind of HDMI to DVI-D cable/adapter.

My question is now, what can I use to join these elements together? I would like to have one piece of gear that I will be using firstly mainly for headphones but later I would like to add speakers.

I was recommended to get a receiver but. It seems pretty big to be placed on my desk. Also, I am not sure if I can use HDMI form the Xbox and then HDMI to DVI-D cable to connect the monitor to the receiver (and I want it to process the sound).

It seems like a fairly basic setup but I have got an impression that it is getting complicated.

My budget is quite limited, around 200$.

Thanks.

This seems clear as mud to me...you might have to run through this again. You have an xbox, PC and a CRT TV? Do you also have a PC monitor or are you using the TV as the monitor? I can't tell when you're running through the gear. If I understand this correctly you are using the CRT TV as the monitor with a DVI-D input for video and you want to run the sound to an AVR to use with headphones for now speakers later?


XBOX ---HDMI---> AVR
PC ---HDMI---> AVR ---HDMI to DVI-D ---> CRT TV
---Optical---> ARV
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Headphones

DVI- D is HDCP compliant, hence the "D".I know of nothing at $200 that will work...that isn't an AVR. You aren't going to find any pre-pro that cheap. Not even used.

You could purchase an HDMI switch with toslink out...run that through a DAC...into a headphone amp. But all that will cost $200 anyway.