In this new world of service-based, free-to-play games, the product manager may be the most important person in the company (second only to the game designer; in some cases more important.)
And no, a product manager is not a new term for a “game designer”. A game designer, traditionally at least, didn’t have to worry about the business objectives. They may have been the consumer champion but that was based on instinct and ego. A product manager needs to temper that instinct with data, the ambition with resource limitations, the game design with revenue requirements.
Nicholas Lovell writes about product management - principally I agree, yet the scope and importance of the PM role is entirely dependent on the company/studio structure. For example, I work in a studio where Product Managers report to Product Owners, whose role is similar to that of an Executive Producer; each production track has a PO, who is in effect the business owner of the project, and therefore also the one who sets requirements and constraints, and ultimately calls the shots. The PO is also in a key role when developing a concept and taking it from an idea into a product. In another studio, the PO/Executive Producer role might be supplanted by the Product Manager altogether.
Nevertheless, in case a product manager does not have such broader production responsibilities s/he can focus on optimizing the game to player (customer) needs, while staying true to the vision. And yes, it is a marketing role only in the sense that product management in the contemporary sense is; it is turning the bullhorn around and listening to the crowd rather than broadcasting to them how great our product or service is.
Also, a shift towards business constraints in the game designer role is evident. This is symptomatic of the current demands for the craft of game design, as more and more platforms embrace the free-to-play model. The bottom line is that one cannot really design games in the free to play context without taking the particular business model into account - free to play affects everything, more or less.
Finally, it is of utmost importance to a successful project and product that game designers and product managers work well together; as I've mentioned in some of my talks, it's like putting magicians and numerologists together: If the combination works, the result is like alchemy: Fun + Virtual goods = Revenue.