The game begins when the main character is asked to try out a new device of Professor Oak's that is used to talk to Pokémon. The player soon meets a wild Pikachu and befriends it. The player must earn Pikachu's trust and eventually it will come and live in the player's house. There are three different activity days: Pikachu's Daring Days, Discovery Days, and Play Days. Each day has a different objective (e.g. collecting food, going fishing) and the player can earn Pika Points, which is the currency used at Abra's Shop to unlock new items.
Eventually, if the player reaches day 365, Professor Oak appears and says that Pikachu has to be released, as it is a wild Pokémon. The player has to go to the woods where Pikachu was found and say "goodbye" several times, upon which Pikachu realizes it can't live with the player anymore, and, sadly, leaves. After the credits, while the player is looking around the front yard and reminiscing about Pikachu, it returns, and the game continues as if Pikachu was never released.