Metroid Prime began development by American upstart Retro Studios Inc. The company was originally founded by former Iguana Studios founder Jeff Spangenberg. Spangenberg built good relations with Nintendo during the Nintendo 64 days when Iguana Studios, under the Acclaim banner, were the first Dream Team partners developing exclusive content for the system.
Spangenberg pitched Nintendo of America his idea for an affiliated studio and soon began heading up five Nintendo funded projects. One of the five initial projects was none other than a 3D Metroid. Nintendo soon found that it was not content on half-way control when its key game properties were involved. Spangenberg was spreading the Retro Studios development talent too thin, and the projects were reported as being mismanaged. Nintendo stepped in and decided to take control over the situation. Nintendo first canned three games it didn't have imminent interest in. Nintendo then canned the fourth remaining game (Raven Blade), leaving only Metroid Prime as a focus. Nintendo soon bought out Jeff Spangenberg from the 50-50 agreement and took full control over the former affiliate, completely turning it into an NOA subsidiary. Longtime NOA Treehouse staffer Michael Kelbaugh was assigned the new President of Retro Studios Inc.
Shigeru Miyamoto and several key NCL R&D1 and NCL EAD team members were significantly involved with the new reorganized development group. While many worried, Nintendo obviously knew what it was doing. Not only did Nintendo hone a truly talented American studio under its belt, but it produced one of the most acclaimed 3D games in the "128-bit" generation.
At Space World 2000, Nintendo showed 10 seconds of Metroid Prime on FMV (seen below).
At the May 2001 Electronics Entertainment Expo, 15 seconds of FMV and pre-renders using in-game models were shown (seen below). Then a few months later in August, Nintendo Japan's Space World show had two additional seconds of in-game footage.
Below are the early gameplay screens. As you can see, the guns look very different from how they finally appeared in the game.
Below is a picture of the lead directors and producers of Metroid Prime. In the background you can also see schematics from one of the levels in Metroid Prime. From left to right -- Steve Barcia, Mark Pacini, Karl Deckard, and Michael Mann.