In accordance with embodiments of the present disclosure, a digital microphone system may include a microphone transducer and a digital processing system. The microphone transducer may be configured to generate an analog input signal indicative of audio sounds incident upon the microphone transducer. The digital processing system may be configured to convert the analog input signal into a first digital signal having a plurality (e.g., more than 3) of quantization levels, and in the digital domain, process the first digital signal to compress the first digital signal into a second digital signal having fewer quantization levels (e.g., +1, 0, −1) than that of the first digital signal.