A:Answer Hey Trueman,
The Arctis 3 and Arctis 5 have a few key differences. While both offer virtual 7.1 surround sound, the Arctis 3 uses SteelSeries 7.1 and the Arctis 5 uses DTS Headphone:X 7.1. The Arctis 3 is purely analog (3.5mm connections), and the Arctis 5 has adapters for both USB and 3.5mm connections. Both are compatible with SteelSeries Engine 3, which gives you a ton of audio customization options. They also both have the same 40mm audio drivers and bidirectional mic, so you're not losing any sound or voice quality when you switch between the two.
Because of the extra power provided by the USB, the Arctis 5 has customizable RGB lighting on both earcups. This will only work with the USB plugged in. The 5 also includes an inline ChatMix dial, which lets you balance between game chat (skype, discord, whatever) and the in-game audio. This is surprisingly useful when you've got that annoying guy either screaming or basically whispering during a match.