Dead Island 3 is officially in development at Dambuster Studios, but a rumored Australian setting has yet to be confirmed.
The next outbreak in the Dead Island series is already being prepared, and fans are now speculating about where the zombie apocalypse could take place next. While Dead Island 3 has not received a full gameplay reveal, its development has been confirmed, with Dambuster Studios currently targeting the first half of 2028 for release.
The biggest unanswered question, however, is the game’s location.
One of the leading theories suggests that Australia could become the setting for Dead Island 3.
Why Australia Is Being Rumored for Dead Island 3
The Australia theory comes from clues associated with promotional material for the next Dead Island game.
Dambuster previously teased the next chapter of the franchise with imagery connected to Jacob, one of the playable characters from Dead Island 2. The teaser included travel-related imagery and stickers that appeared to reference several locations.
Australia was among the details spotted by fans, leading to speculation that the next outbreak could move away from Los Angeles.
However, this should not be treated as confirmation. The same imagery included references that could point toward other destinations, meaning the stickers may have been designed to encourage speculation rather than reveal the game’s actual setting.
Dead Island 3 Is Officially in Development
Unlike the Australian setting, the existence of Dead Island 3 itself is no longer merely a rumor.
In an official 2025 update celebrating the Dead Island franchise, Deep Silver said that Dambuster Studios was already working on what comes next, while describing the outbreak as far from over. The post also revealed that Dead Island 2 had surpassed 20 million players.
Financial documents from Dambuster Studios later provided much more concrete information. They identified Dead Island 3 as a project in development and stated that parts of the game were already in early production, including feature, character, world and story design.
The documents listed a current predicted release window of Q1/Q2 2028.
What an Australian Setting Could Mean
If the Australia rumor eventually proves accurate, it could give the franchise a dramatically different environment.
Instead of the dense Los Angeles setting of Dead Island 2, an Australian installment could potentially combine major coastal cities, smaller settlements, remote wilderness and large stretches of isolated terrain.
That would also create opportunities for a wider variety of environments and zombie encounters.
Of course, these are possibilities rather than confirmed features. Dambuster has not officially announced Australia’s involvement, nor has it revealed the game’s map, gameplay systems or story.
Could the Game Still Be Set Somewhere Else?
Absolutely.
The promotional clues have generated theories about multiple destinations, and Australia is only one interpretation. Other locations have also been discussed by fans based on the teaser imagery.
Until Dambuster Studios officially reveals the setting, it is safer to describe Australia as a rumored destination rather than a confirmed location.
When Could Dead Island 3 Be Released?
At present, the best available indication points toward the first or second quarter of 2028.
That does not mean the game has a locked release date. Development projects can be delayed or rescheduled, particularly while they are still in early production.
For now, 2028 should be treated as the developer’s current target window, not a confirmed launch date.
Final Verdict
Dead Island 3 is real and officially in development, but the Australian setting remains unconfirmed.
The theory is interesting because Australia would provide a completely different backdrop for the franchise, but there is currently no official announcement confirming that the next outbreak will take place there.
What we can say with confidence is that Dambuster Studios is working on the next Dead Island, with early production underway and a current Q1/Q2 2028 target.
Until the studio reveals more, the Australia setting should be treated as a rumor.