We study the evolution of localized wave groups in unidirectional water wave envelope equations [the nonlinear Schrödinger (NLSE) and the modified NLSE (MNLSE)]. These localizations of energy can lead to disastrous extreme responses (rogue waves). We analytically quantify the role of such spatial localization, introducing a technique to reduce the underlying partial differential equation dynamics to a simple ordinary differential equation for the wave packet amplitude. We use this reduced model to show how the scale-invariant symmetries of the NLSE break down when the additional terms in the MNLSE are included, inducing a critical scale for the occurrence of extreme waves.