Although traditionally it was believed that having advanced Theory of Mind (ToM) abilities led to social competence and prosocial behaviors in children, it has also been shown that some children use their high ToM abilities to strategically manipulate others instead of acting prosocially towards them. It is an important developmental task to understand the factors contributing to this behavioral divergence for children with advanced ToM understanding, which also has significant practical implications for bullying interventions. We contend that this divergence cannot be explained by a lack of moral competence or empathy, but that the existing evidence lends itself better to a motivational explanation. We propose that the direction of social motivation varies across children and the self versus other oriented social motivation determines if children will use their developed morality and empathy competencies in social interactions to act prosocially or instead cognitively divert moral and empathic emotions to avoid negative feelings about manipulating others. We show how self versus other orientation has been used as a legitimate distinction to inform other domains of psychology and conclude by discussing possible correlates and precursors of this difference in the direction of social orientation in children.