Dylan Cuthbert, programmer and director of the Star Fox series, explained how the names of the team were decided. This was shared in a special 30th anniversary celebration video.
“So the Star Fox characters, their design, came from, I mean, the actual art came from Imamura-san, who was one of the main 2D artists at Nintendo at the time. Of course, also with instructions from Miyamoto, to indicate what type of character would enter the game.
And then they came to my office, and I don’t know why they came to me, but maybe they wanted English-sounding names for these characters. And they had a design, a name already decided, which was Falco Lombardi. And the other three said, ‘Well, it’s a fox. It’s a hare. You know, “and this is a frog or a toad”. And they said, ‘Well… what do you call it?’ And I looked at them, and I looked at the characters that they had drawn, these really cool little sketches. And I said, ‘Okay, well… I think Fox must have a good-sounding name, and he’s flying in a spaceship, so… McCloud sounds pretty good, let’s give him McCloud.’ And for the other two, I looked at them and laughed because the names came to mind and I was like, ‘Okay, we’ll call this guy Slippy because he looks a little sliding. And this guy looks old, but he seems to have a lot of energy. Let’s call him Peppy. And that’s where the names come from. And they stuck. So it was a pretty fun time in game development.”
Star Fox ended on the NES in 1993. Cuthbert then served as Game Director for the DS game Star Fox Command in 2006, and held the same role on Star Fox 64 3D on the 3DS in 2011.
You can watch Star Fox’s full celebration video with Cuthbert below. A few other questions have been answered, and you can see him playing in the original game.