Is Dead Island 2 still happening? Apparently, if the game's publisher, THQ Nordic, is to be believed. As you may know, Techland was originally poised to make Dead Island 2, but wind up making Dying Light 2. The game's publisher, Deep Silver (which is now owned by THQ Nordic) then tapped Yager to make the game in 2012. Then during Sony's E3 2014 showcase, the game was announced, scheduled to release in 2015.
Later that year, gameplay footage of the game was released at Gamescom. The game was set in California, as was a bit more colorful and lighter in tone than its predecessor. Then in 2015, the year the game was supposed to release, Yager was dropped from development and the title moved to another studio that wasn't named. According to Yager's Timo Ullman, their vision for the game was canned because it didn't line up with Deep Silver's vision for the franchise.
In March 2016, Deep Silver announced Sumo Digital was making the game. In 2017, it reiterated the game was still in development. In 2018, it reiterated it was in development again. Yet, nothing. The game was supposed to release in 2015, and now it's 2019 and we haven't seen the game in nearly four years. Clearly, it's not in active development.
That said, during its recent earnings call, THQ Nordic listed the game in its upcoming releases, and noted that it's still coming to PS4, Xbox One, and PC, which would suggest it's releasing sometime soon, because the next generation of consoles is right around the corner.
Unfortunately, THQ Nordic didn't talk about the game, which many think will never release. However, with Crackdown 3 and Team Sonic Racing out of the way, Sumo Digital may now be able to focus on the title. As of right now, the only other announced game they are working on is Project Nova, so it finally could be Dead Island 2 time, unless it has something it's working on that hasn't been announced.