Problem with both Watch Dogs and Far Cry 4 is that they use XAudio2, which doesn't properly support Dolby Digital Live or DTS Interactive. I finally came across a way to fix this.
Copy the XAudio2_#.dll files that are in C:\Windows\System32 to a new folder. Use HxD Hex Editor to open each of them and use the replace feature to replace the hex sequence 4D 06 9F F1 2C 08 27 4E BC 73 68 82 A1 BB 8E 4C 00 00 00 00 with 26 0E 87 E4 C5 3C D2 4C 46 BA CA 0A 9A 70 ED 04 00 00 00 00 then save. Do this for each of the dll files (my computer had 8 of them).
When you save them in HxD Editor it saves a .bak file as well for each which is the unedited dll saved as a backup file
Once those hex sequences are changed for all the dll files copy those files back in to the System 32 and also the SysWOW64 folders. If you get any errors about not being able to replace the file, select then right click on the unedited dll and select 'Take Ownership'. You should then be able to replace the dll with the edited one.
After they are all replaced, restart your computer and DDL should work in the game.
EDIT/NOTE: I confirmed that this does fix DDL support for Watch Dogs & Far Cry 4, however, I discovered that doing this causes the in game audio of Far Cry 3 not to work (also noticed it for Flashback HD). Not sure why Ubisoft's games are always so broken.
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