The original PS3 phat model could not bitstream either DTS:X or TrueHD audio and had to decode these formats onboard and output the results as LPCM. However the PS3 Slim can bitstream both, but not if the Blue-ray is a 3D film. The PS3 cannot bitstream TrueHD if the video content is sequential 3D as used for 3D Blue-ray titles. So the answer is yes, the PS3 can output Atmos encoded content as long as the console is the slim model, you bitstream the TrueHD audio and as long as the film isn't the sequential 3D version.