To Rewrite Or To Not Rewrite
That is the question, and like so many other questions, the answer is, it depends.
Presented here for your perusal, 6 different stories with 6 different initial conditions, 6 approaches, and 6 different results.
I've been through a few of these cycles myself, and I've seen most of the different results. It's often easy to see what was going to happen in hindsight, but looking forward it's not so easy. And sometimes doing exactly what you planned and having it work the way you expect just isn't enough.
My first foray into entertainment software was Falcon 4.0. It was a critical success, and you can still get it on Steam. It was even a commercial success (sort of), but it also played a large part in the end of the company.
When I came on board the project was already a year late and the direction was unclear. We ended up scrapping the code from V3 and starting from scratch. That let us build a state of the art system, with the most detailed graphics, flight model, and AI available at the time. We made the choice to add 16 player multiplayer capabilities to it.
This was the late 90s, and LAN parties were all the rage. People would lovingly pack their computers in the back of their cars, gather at someone's house, hook them up to a brand new network created just for the day, say some magic incantations, and 7 times out of 10 the computers would connect and the games would begin. Our fanbase loved it. They'd spend thousands on their computers, then thousands more on custom seats, cockpits, sticks, throttles, and display systems to get an advantage.
But doing all that took time. By the time we released Falcon 4.0 the market had shifted. We were building study simulations, when the mass market wanted survey simulations. So in one sense our gamble paid off. Our target market loved what we did, and we got all sorts of awards. On the other hand, it stretched the company and there were games with better ROI (Star Trek and Magic the Gathering in this case) that our new owners decided to focus on. So in that sense our gamble didn't pay off, and the rest of the Falcon series never got made.
Should we have built Falcon 4.0 as a modification of Falcon 3.0? We'll never know for sure, but things certainly would have been different.