Nintendo hyped up Star Fox 2 and the leaked beta shows the game was near completion. Actually, Dylan Cuthbert, developer and now founder of Q Games, says it was “fully completed.” So, why didn’t it come out?

Cuthbert sheds some light on the situation.

Star Fox 2 was fully completed. I was lead programmer and whilst Giles made Stunt Race FX, myself and the rest of the original Star Fox team (i.e.. Nintendo’s artists and designers) expanded Star Fox into a full 3d shooting game. We used state-of-the-art technology such as arbitrary plane clipping (which has only been seen recently in such games as Crash Bandicoot 2 & 3) to create some rather spectacular effects. (for the time) The reason for non-release was the then impending Nintendo 64, which of course was intended to be released a lot sooner than it actually was. Miyamoto-san decided he wanted to have a clean break between 3D games on the SNES and 3D games on the new superior 64 bit system. In retrospect, he could have released Star Fox 2 and there would have been over a year and a half before the N64 came out. But hindsight is always 20/20. Star Fox 64 incorporated a lot of the newer ideas we created in Star Fox 2 but it didn’t, in my view, take the genre a full step forward. Star Fox 2 really was a different direction of gameplay.

This quote was captured from an excellent Star Fox 2 retrospective written by SNES Central, which archived it from Emulatorium. Check out the article for a more detailed history of the game and analysis on the various prototypes.