Dead Island 2 has certainly been through the ringer, but it's still in development. The game was first revealed at E3 2014 and slapped with a Spring 2015 release window, but was delayed until 2016 after the developers "didn't reach the goal" they had set out to achieve.
Shortly after the delay, the developer (Yager) and publisher (Deep Silver) parted ways, then Yager shut down, which lead developer Sumo Digital to pick up the work on Dead Island 2. As of November 2016, the game was reportedly making "fantastic progress" at Sumo Digital.
Last month, a job listing at Sumo Digital suggested that the game was still in development, despite the silence around it. Recently, publisher Deep Silver confirmed that Dead Island 2 is still in development to Eurogamer in the following statement:
"Dead Island 2 is in development at Sumo Digital, and we are excited by the progress the team are making with Deep Silver's most successful IP. When we are ready to share more information, we will."
So there you have it. The game still exists in some state somewhere and is being worked on.
