Deep Silver announced the game on August 7:
Deep Silver announced today Dead Island: Epidemic, a new ZOMBA (Zombie Online Multiplayer Battle Arena) game set in the ever-expanding Dead Island universe. Dead Island: Epidemic will pit 3 teams of players against each other in a desperate fight for survival. Dead Island: Epidemic is a Free-to-Play PC title that will feature all the trademark elements that are part of the Dead Island experience.
More details will be announced during the upcoming Gamescom 2013 in Cologne and stay tuned for more on the Dead Island universe as a whole!
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Link to original announcement: