As former producer Brad Foxhoven tells IGN, while Nintendo at first surprisingly gave its blessing to the project - being big John Woo fans, apparently — the company was also aware of how badly it could be burned when Hollywood takes liberties with its characters.
"Nintendo was definitely discouraged by [Super Mario Bros.], but felt that with John [Woo] they would be in better hands," Foxhoven told IGN. "The challenge for us was that it felt that the biggest lesson Nintendo learned from Mario was to hold onto their rights even tighter, limiting collaboration when it came to translating Metroid to the big screen. Our entire development time was spent exploring the Metroid world, and what we could — and couldn't — do within it."
The biggest of these problems concerned Samus' back-story, which the producers would need to explore if they were making a movie about her. "What are they doing when they are NOT fighting? What is their daily existence and relationships?", he adds. "What are Samus's aspirations, history, and fears? Nintendo appreciated the questions, but had never thought about them before, and ultimately didn't have a lot of answers. In the end, they felt uncomfortable with our team being the ones to propose those answers."
The Metroid movie project eventually fell apart in 2007, with Nintendo and Team Ninja doing their own Samus back-story in Metroid: Other M for the Wii.