Pokémon cannot truly be considered "Pocket Monsters" if they cannot fit in your pocket. Enter the Pokéball, a useful invention that can hold any Pokémon inside of it. The Pokéball comes in a variety of variations, and you can make them out of nuts and other organic materials. But it is still unknown what occurs inside the Pokéball.
What exactly occurs inside a Pokéball is the subject of numerous theories. We can deduce what the environment inside a Pokéball is like and what this all means in the Pokémon World based on the scant official data available from interviews and in-game information.
What Does It Feel Like to Be Inside a Pokéball?
Actually, very little is understood about Pokéballs. According to the anime, when a Pokémon is struck by a ball, they are transformed into an energy form and sent flying inside of it. In the games, Pokémon physically condense into the balls. In either case, they are drawn inside the ball. All of this suggests that the ball can change creatures to fit inside of it.
There are no actual living things inside the ball in the Pokémon anime, which will soon have a new protagonist, and Pokéballs are only occasionally depicted holding living things. Although it's possible that Misty's Psyduck's portrayal of himself inside one of her Pokéballs in an episode was merely stylistic, it's still possible that what happened inside was actually possible.
Pokémon are transformed into energy and kept inside the ball, that much is certain. As evidenced by the Pokémon Transfer System, the way Pokéballs appear in a player's Box when they have more than six Pokémon on them, and how the psychic move "Teleport" affects Pokémon, the Pokémon world has demonstrated that physical matter can be transformed into energy for transportation. Thus, rather than being physically shrunk down to size, Pokémon appear to be transformed into energy inside the Pokéball.
Inside a Pokéball, It's Very Comfortable
There are some interesting facts, though not much official information has been released about what the inside of a Pokéball is like. In particular, Pokémon Sun and Moon producer Junichi Masuda described in an interview how he thought a Pokéball's interior felt: "I believe it's safe to say that the interior of a Pokéball is very comfortable; it's a very comfortable setting. It might be comparable to a deluxe hotel suite room."
This seems to suggest that the interior of a Pokéball is created artificially to be appealing to each Pokémon. As a result, the Pokéball functions as a sort of virtual reality created specifically for Pokémon and tailored to each species' needs. These ecologies are created with the comfort of their inhabitants in mind, giving them a perfect, private space.
That does not imply that all Pokémon will enjoy it, though. Many Pokémon in the game appear eager to be outside a Pokéball so they can interact with people, and Ash's Pikachu and the Pikachu from Pokémon Yellow seem to dislike being contained in a Pokéball. Since Pokéballs are intended to create a cozy environment, it appears that Pokémon like Pikachu dislike them because of how solitary they are. Although there are locations for PC-bound Pokémon, such as the PokéPelago, it is unknown if the Pokémon can communicate with those in other Pokéballs. In addition, trainers frequently allow their creatures to interact with one another outside of Pokéballs in both the games and the anime, as can be seen in the Pokémon Camp feature in Pokémon Sword and Shield, where Pokémon can freely roam around and have fun with one another.
So, we can assume that, while Pokéballs aren't uncomfortable, they're not exactly meant for long-term containment.