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The game starts out with Professor Oak inviting the player to test-drive a new Pokémon based TV program called "Pichu Bros. in Party Panic". After witnessing the first episode, Professor Oak asks the player to send in a report, and once it's been sent, Professor Oak notices a faint tapping noise and instructs the player to search for it. Over by the glass door, a wild Pikachu, Treecko, and Torchic can be seen outside, staring at the player. While the former two run away in fear, Pikachu excitedly awaits to befriend the player. Professor Oak notices how they seemed to be attracted to the Pokémon program, which gives him an idea to have the player watch TV with Pikachu and record it's reactions.
One of the unique features of Pokémon Channel is that it takes place in real-time using the GameCube's internal clock, similar to Animal Crossing. The player has limited controls regarding the TV at first, but will eventually be able to do other things. The player can interact with wild Pokémon out in the field and some of them quiz the player, answering correctly rewards a Pokémon card. The player has the ability to collect Pokémon merchandise, such as plushies.