This paper discusses some of the key design drivers for the next generation of the Oyster wave energy converter which is being developed by Aquamarine Power Ltd. The paper presents a general overview of the Oyster technology including the nearshore wave energy resource, the power capture characteristics of bottom-hinged flap type oscillators and the hydroelectric power take-off system. A status update is then provided for the full-scale proof of concept device which was successfully installed at the European Marine Energy Centre (EMEC) in Orkney, Scotland in 2009. The final section, and main body of the paper, concerns the next generation of Oyster device, Oyster 2, which is currently being developed for deployment in 2011. The paper provides an introduction to the fundamental tenets which have guided the design as well as an overview of the ensuing features and the resultant step-change improvement in the performance of the device.