Electronics giant Sony has formed Sony Interactive Entertainment LLC (SIE), a new company that combines Sony Computer Entertainment (PlayStation hardware and software) with Sony Network Entertainment (services like PlayStation Vue and the PlayStation Store).

That these were separate companies at all has always been odd given the close relationship between the two, but perhaps the most interesting part of SIE's formation is that it won't be headquartered in Sony's home country of Japan. SIE will be based in San Mateo, California with Andrew House—the current president and CEO of Sony Computer Entertainment Inc. in Tokyo—serving as its CEO. Sony Corporation CEO Kazuo Hirai will sit on the board.

It's no secret that videogame sales in Japan have been on the decline—2014 saw its console market drop to its lowest point in 24 years. Notably, its Top 10 selling games for the year were for Nintendo platforms, eight of which were on 3DS, reflecting Japan's preference for handheld and mobile gaming. Meanwhile, the PlayStation 4 continues to fly off Western shelves. Sony has sold 35 million units to date, far outpacing the sales performance of the PS2, the best-selling console of all time.

Sticking SIE's headquarters in one of its biggest markets—and close to the huge game development scene on the west coast of the US—seems like a sensible move, although it's unclear what exactly SIE's plans are. So far, Sony has only said that SIE will "retain and expand PlayStation user engagement, increase Average Revenue Per Paying Users and drive ancillary revenue," which is a fancy way of saying "make lots of money."

As a side effect of the formation of SIE, it appears the CEO positions of the American and European branches of Sony Computer Entertainment have been eliminated. Andrew House will serve as the unit's single president and CEO. SIE starts with $2 million in working capital and starts business on April 1 this year.