One of the first things my new students are supposed to do is to decide their English nicknames. Yes, in class, I call my dear students by their nicknames, not by their real names, because it's easier and more comfortable for me, and probably for the students.
In Japan, when addressing people, you usually add an honorific to their names (first names, last names, or both) unless the persons are your close friends, siblings, children, enemies, and the like. There are various honorific forms to choose from. Calling people by their family names is a common practice here; first names are reserved for such persons as mentioned above. Oh and the first name is not literally a first name in Japan, that is, the family name comes first, and the given name last, no middle name. So in Japanese, my name is Hatano Kiyoharu, and in English, I write my name as Kiyoharu Hatano in case you confuse it.
That being so, addressing has a bit sensitive element here. I can't think of a proper form of address when calling my students. That's that. And, why, this is an English class, so it's relaxing and fun to call each other by their English nicknames.
Basically, students can decide their nicknames as they like, as long as they sound "English" anyway. Funny names have been coming out up to now. I'll write about some of them for the next entry.