In this paper the authors will describe a system‐level, multi‐physics based development of PowerBuoy® products at Ocean Power Technologies (OPT). The PowerBuoy is a moored system which extracts useful electrical power from waves. Different PowerBuoy solutions have been developed for different markets (grid connected systems vs. smaller autonomous systems) and/or different customer applications. The PowerBuoy design approach focuses on clarification of operational requirements at the onset of the effort. An iterative closed‐loop process optimizes various aspects of the system. The goal is a solution that addresses all Key Performance Parameters while minimizing life cycle cost. This paper will outline the PowerBuoy design process, which consists of the following steps, illustrated by examples from recent development efforts.