Do not read if you want your childhood re-evaluated. Yes, I know that it sounds like "Ash's Coma" but if you think about the ending [no spoilers here] it includes all of the games. Not the TV show.
At the age of ten, young Red began encountering some...problems. His father became abusive to both him and his mother due to their financial troubles. His mother wasn't very nice either and juggled many jobs, including being a bartender. Red soon became completely sick of all of his troubles and began to create a dream land where everything was perfect.
Red wanted nothing more than to live in this world of his. Soon, he met with Bill, a great inventor from the city, who had a new machine he wanted to test. Red agreed. The machine would induce artificial lucid dreaming, or a state in which you are aware that you are dreaming. Red believed that living in this world would allow him to escape his burdened life for a new one. That night, Red slept over at Bill's laboratory in the machine.
Suddenly, he woke up in his own bed in his own room, thinking the machine had failed and he was taken back home while he was asleep. He walked over to his computer, only to find that it contained an item called POTION. Red clicked "remove" and the POTION was in his hand. He was dreaming! He walked downstairs to greet his parents, only to find that he had just a mother. She was extremely nice and caring, though, and when Red asked where he was, she began to talk to him about why he was here. She told him that everything in his world was specifically created for a purpose, even if Red himself hadn't made it up.
Red's mother is his sense of family support. She constantly reminds him that his skills are unmatched by any opponent, even the toughest of rivals.
Red's father isn't around because Red simply did not like him. He couldn't think of anything good to turn him into.
Blue is his motivation. He keeps pushing Red to be better than himself.
Professor Oak is like Red's father figure and is everything his dad wasn't. Also, Daisy provides that "little sister sideline-cheerer" support.
The Gym Leaders are Red's overcoming of his challenges. One day, he will defeat those challenges and become the Champion, but he still has a road ahead of him.
The cities are named after colors to ensure that Red has a bright future in this dream world.
The Pokémon all serve different parts of his wish fulfillment as well. Some represent the evil in him, some represent the good, some represent his childish nature while some represent maturity. One breed, however, is Red's dearly departed pet mouse, Sparky. Pikachu represents his love for his deceased pet, as well as his rather rebellious side. The Electric type comes from the name; Red's mind found a literal meaning for this.
Each landmark also has its purpose in Red's fantasy. The Great Marsh is his visualization of how large his problems are (you often get stuck in marshes as you do problems). Silph Co. is his plan to be successful in life, and the Pokémon Mansion is his interest in science. The Pokémon Museum is his desire to start a new life, as fossils start a new life here. The Lavender Town Pokémon Tower is yet another tribute to his dead mouse. He has still not let go.
In his world, everything and everybody crumbles beneath his feet as if it were too easy. Red soon gets bored. In his sleep he mumbles, "Bill, Bill!"
Bill starts to help Red out of the contraption, but Red remembers his family and why he was here in the first place. He goes back to sleep, catching more Pokémon and becoming the Champion, finally defeating Blue once and for all. But Red has now been on the machine for weeks. He perishes of hunger.
The machine is never used again... Until another young boy by the name of Gold finds it.