Editor's Note: Remember when this was a rumor? Well it was just debunked.
Coming from the Paul Gale Network, where the rumor originally started:
"It was in these past few days that I was able to find out if there’s any truth to Star Fox – Metroid: Fusion Saga.
The good news is that going into E3, I have an answer: No. This game is not what Retro Studios is currently working on and it will not make an appearance at E3 next week.
According to my source, the game was indeed at one time a proposal. Furthermore, the idea of Star Fox and Metroid crossing paths in a more unified Nintendo universe represented but one of several potential team-up projects that Nintendo has been considering. Games like Pokémon + Nobunaga’s Ambition and Project X Zone (Capcom/Namco Bandai/Sega game in development by Monolith Soft) were also thought up during this period of establishing more Nintendo character familiarity, helping build up less popular franchises, and showing the core demographic that going into the 8th generation of gaming with Wii U and 3DS, Big N is a forward thinking company."