Project Neo takes place between the classic Red/Green/Blue/Yellow games and the Gold/Silver/Crystal games and a few years after Red's success in becoming the Pokémon Champion.
- Red is the new Pokémon Champion, though he has chosen a life of contemplation and seclusion over reigning as the leader of the Elite 4.
- Blue, his friendly rival, is the new Gym Leader in Viridian City. Still the final stop on any trainer's tour and run at the Elite 4, he offers help and advice to young trainers who pass his way so that they might see him later as an honest challenge.
- In light of Professor Oak and Pallet Town developing two of the greatest trainers Kanto has known, Pallet Town and nearby Viridian City has exploded; Oak now runs a boarding & training school for young trainers interested in following in Red and Blue's footsteps.
- Giovonnie has apparently given up his evil ways and disbanded Team Rocket. He has gone into business for himself, seeking to atone for his crimes by making the world of Pokémon a better one. Through ROCKET CO. he has developed new technologies and items to better the lives of trainers and Pokémon the world over.
- In light of ROCKET CO.'s advancements, SILPH CO., longtime advocate of Pokémon and trainers, has fallen on hard times. They have begun to wind down operations and have started closing various PokéMarts in towns all over. These are replaced by RocketMarts, where Giovonni's cheaper, and some would say better, products are widely available.
- Rumors abound throughout the land. It is said a former Team Rocket leader disappeared in the shadows of the organization's final days, evading capture and carrying out some of the team's darkest plans yet. He is supposedly attempting to rebuild Team Rocket from the ashes of its defeat with diabolical plans for not only Pokémon but his former conspirator Giovonnie.
- Professor Oak has been excidedly combing the world for new Pokémon breeds after the success of Red and Blue in assembling his Pokédex project. With the help of Bill, the Professor has been able to generate and breed new Pokémon as well. It is an exciting time for Professor Oak, but some wonder if there are not hidden agendas to his travels as well...