In surprising news, Game Freak has confirmed that not all Pokemon will be found in, or transferable to, Pokemon Sword and Pokemon Shield. In effect, Pokemon Sword and Shield will block the transfer of Pokemon that aren't included in its Galar-specific Pokedex. Only the Pokemon that Game Freak chooses will be included in the game. This was confirmed by Game Freak today during an E3 2019 Nintendo Treehouse livestream segment for Pokemon Sword and Shield, though offhandedly.
The roundabout reveal came as part of a discussion regarding Pokemon Home, Nintendo and Game Freak's new cross-game Pokemon transfer and storage system. The representative said specifically that players won't be able to transfer Pokemon from Pokemon Home into Pokemon Sword or Shield if that species isn't included in the PokeDex for Galar, the two games' region. Clearly, the response could easily be misinterpreted, but, at the very least, it can be assumed that not all Pokemon will be available in Pokemon Sword and Shield.
The statement can be misinterpreted in terms of the scale of the issue. While some Pokemon won't be included in the game, it isn't clear how many won't be included. For example, perhaps Game Freak doesn't want specific Legendary Pokemon to be able to be used in Galar. Or perhaps Game Freak will want Alolan Pokemon to remain in Pokemon Sun and Moon only. Of course, the scale could go the opposite direction as well. Game Freak could potentially block all of the region-specific Pokemon from any of the previous Pokemon games.
And an answer to the question "Why?" is also left unclear. Game Freak may be making this decision purely due to design. Keeping Alolan Pokemon in Pokemon Sun and Moon or Legendaries out of Galar is one such example. Another reason, which is probably the most understandable, is that it takes a lot of work to create the 3D model, animations, and gameplay mechanics for a Pokemon. Game Freak simply may not have the time and resources available. A third reason could be that, like Game Freak has done previously, all of the Pokemon will be rolled out post-launch so as to create a unique launch atmosphere and manage the competitive scene.
Needless to say, Nintendo and Game Freak have some work to do to end the worries of the Pokemon community. Maybe Pokemon fans have spent years putting together their Pokemon collection and want nothing more than to bring it into each new Pokemon game. Not to mention the most competitive of trainers, who'll be incredibly angry to hear they may not be able to form their favorite teams in Galar.
Worst case scenario, if Game Freak believes that it wants to keep Galar limited, and has no plans to add all Pokemon, then hopefully Pokemon fans can persuade them differently. There's always the possibility of adding all of the Pokemon post-launch.
Pokemon Sword and Pokemon Shield release November 15 exclusively on the Nintendo Switch.