Last week's executive changes at Sony Computer Entertainment reminded us of the day we learned why it's foolish for outsiders to presume to know the course of Sony Corp. While in Tokyo during the fall of 2004 for PlayStation Portable reporting, we were chatting with a Sony veteran, whom we casually asked, "Do you think Kutaragi will be the next CEO?" For us, the question was rhetorical. Because at that point, PlayStation creator Ken Kutaragi was widely seen as the heir apparent, having been named the corporation's executive deputy president in 2003. You can imagine our surprise when our source simply said, "No."

"But he's already in charge of big chunks of the company," we said, citing Kutaragi's control of Sony's semiconductor and Blu-Ray divisions, in addition to the highly profitable PlayStation group. Our source informed us that while it was true that Kutaragi was in charge of a number of vertical silos, there were numerous executives running large horizontal slices of the company. These executives were little-known to outsiders, but they were nevertheless powerful and influential within Sony. And by and large, they didn't like Kutaragi. They were terrified of his management style and the changes that he would likely implement should he ascend to the throne. "How can he lead," said our source, "if none of them are willing to follow?" Seven months later, the staffer's insights were proved to have been spot on when Sir Howard Stringer was named to the top job instead of Kutaragi.

It was a gently-delivered but harsh reminder that Sony observers, particularly those of us in the West, have very little visibility into Sony and its palace rivalries. Which means trying to use last week's executive appointments to predict Kutaragi's future at Sony is futile. Nor are we likely to soon find out whether Kutaragi's ceding of day-to-day operations to Kaz Hirai was completely voluntary or whether it was imposed from above. Those who know won't tell, and those who will tell don't know.

Nevertheless, when Sony Computer Entertainment announced its flurry of executive changes, our inbox started blowing up despite the late hour--and we did the same to the Blackberries of our most knowledgeable sources. Journalists, industry veterans, and Sony insiders and Sony rivals alike--we were all trying to figure out what these developments meant for the PlayStation and for newly-minted SCE chairman Ken Kutaragi. The main question on everyone's mind was this: was his ascension to chairman of SCE a promotion, or was he being eased out by Sony Corp CEO Howard Stringer? And what would it mean for the future of the PlayStation business?

In the days that followed, much of the speculation and analysis was misleading, inaccurate or just plain outlandish. The San Jose Mercury News said that Sony was "shaking up the management of its games division," when in fact the key changes involved promoting executives into bigger roles. The Wall Street Journal implied that Kaz Hirai--promoted from president of Sony Computer Entertainment America to president of all of SCE, reporting to Kutaragi "had more expertise in software than Kutaragi, who's an engineer by training. But that makes little sense, given that Hirai's own background in marketing, and the fact that SCEA's primary function is marketing and sales.

The most bizarre commentary, however, came from Nomura Securities analyst Yuta Sakurai. "The appointment of Hirai could be the start of a shift from hardware to software," he told the Financial Times. "I cannot now imagine a PlayStation 4." Rival analyst Michael Pachter of Wedbush Morgan called Sakurai's remarks foolish and embarrassing, then went on to say, "I think it's prudent succession planning. Kutaragi is the visionary, and his work on PS3 was done at launch. They need to groom him to replace Stringer." Yet just as unfounded, for the reasons we cited at the beginning, was Pachter's assertion that these moves indicated that Kutaragi was being groomed to be Stringer's successor. As outsiders, we have to admit that we simply don't know the ins and outs of the court intrigue at Sony Corp.

What we can make some educated predictions about, however, is whether this is good for the PlayStation. And by our lights, it's quite positive. Here's what's on SCE's plate at this very moment: three product lines that must be managed over the next five to six years (PS2, PSP and PS3); two more product lines that are almost certainly already in the planning stages (PS4 and PSP2); an online service, an online store, operating systems and system updates for each of the post-PS2 machines; and one of the world's largest game studio operations. Given that workload, Sony desperately needed to free Ken up to do the vision thing, and groom the next generation to run SCE on a day-to-day basis, much like Microsoft did when Bill Gates ceded operational control of Microsoft to Steve Ballmer. So while we have absolutely no visibility into whether this evolution was initiated by Kutaragi or by Stringer, it strikes us as precisely the right move to help ensure the future health of the PlayStation business.

Equally intriguing is the continued rise of Western-born or Western-trained executives within Sony. Back in 2000, when Kutaragi was still in his spitball-throwing phase, he told our colleague Steven Levy, "Sony is a very old company. The 50-year-old company will be taken over by their child." The child, of course, being PlayStation. So far, the child has yet to become the father to the man at Sony Corp. But look more closely at these recent changes. SCEA president Kaz Hirai now assumes the top operational job for the entire PlayStation unit. Sony Computer Entertainment Europe president David Reeves joins Hirai as a deputy president in addition to running SCEE. Add to that the following previous appointments--SCEE's Phil Harrison being put in charge of Sony's worldwide game studios; and the two Welshmen, Sir Howard Stringer and Andrew House, serving above them all as Sony Corp's CEO and chief marketing officer, respectively "and it's clear that, on the surface at least, the center of gravity of Sony's top executive class is steadily shifting from East to West.