It seems that they go a few directions: The most common seems to be to try and generalize, because relearning most of your job skills every few years starts to get annoying the 20th time you've had to do it. It's different when you are younger and everything is new, you just chalk up a major tooling change as just something else to learn. But when the next hot platform or architecture or whatever comes out you get ti…
I'm at an inflection point these days on whether I want to push forward on the management path or go for the third path, as you mentioned above.
The management path seems to be the path of least resistance, but getting into the politics of management is unappealing. Also the level of competition for management jobs is at another level. As an engineer, I'm used to having jobs thrown at me left and right, but it seems like engineering managers compete for jobs quite a bit more. It feels risky to go from something with high demand to something with clearly much lower demand.
The third path is very appealing from a satisfaction standpoint, but clearly a lot riskier, especially for someone US-based who needs better healthcare as they get older. Also the feast or famine nature of consulting can be a little brutal. I think a combination of consulting plus products is the best bet, but it can take a while to get that going.