*UPDATE* Deep Silver has issued an official statement on the issue:
We deeply regret that an incorrect version of Dead Island was inadvertently made available to players on Steam launch in North America.
We are very sorry for any issues you may have experienced while playing the game – the correct, patched version will be made available to North American players ASAP.
Other territories are not affected by this situation, the fully patched game will be available on Friday as announced.
As we’ve finally reached the long awaited release date for Dead Island, gamers around the world popped the game into their consoles to check it out while those on steam finally got to push play as soon as it finished downloading, or if they happened to pre-load it this weekend. However they were in for quite a surprise as they discovered their characters no-clipping through the levels, and all other matter of strange happenings. It turns out that for whatever reason the Dev Build of Dead Island was accidentally released on Steam, and is as of this writing still the version that’s up.
This issue will surely be resolved shortly this morning as soon as everybody wakes up, so just hold tight and try to nurse that post-Labor Day hangover. You all have one of those right? If you don’t, you did Labor Day wrong.
We’ve contacted Deep Silver for further information and will let you know as soon as we find out anything. Just keep an eye out and bear with them, these kind of things happen.