It seems like fans of the first Dead Island hoping for a sequel might have to wait a bit longer as Deep Silver the Publisher of the game has decided to part ways with the development team who was in charge of Dead Island 2. In a statement they said
With Dead Island 2, Deep Silver has always been dedicated to delivering the sequel that Dead Island fans deserve. After careful consideration, today we announce the decision to part ways with development partner YAGER. We will continue working towards bringing our vision of Dead Island 2 to life, and we will share further information at a later stage.
Normally I would say that this project is dead and its time to move on but considering how much time and effort Deep Silver has gone to develop the franchise, I’m sure will see this game just not any time soon.