Players might not be able to bring over all of their Pokemon to Pokemon Sword & Shield. During today's Nintendo Treehouse Live event at E3, Nintendo revealed that only Pokemon that are in the Galar Pokedex can be transferred from the soon to be released Pokemon Home cloud storage service. Although Nintendo didn't state how many Pokemon are in the Galar Pokedex, the implication is that you won't be able to complete a "Living Pokedex" (a collection of every single Pokemon) in Pokemon Sword & Shield.
Due to the growing number of Pokemon species, there are usually a few hundred Pokemon species that can't be natively caught in a Pokemon game. If a game doesn't have a specific Pokemon species, you're usually able to transfer Pokemon from older games through a service like the Pokemon Bank or simply complete a trade between older and newer games. Since you won't be able to trade between Pokemon Sword & Shield and older games, The Pokemon Company released Pokemon Home as a more permanent solution. Players would be able to transfer Pokemon from older games into Pokemon Home and then freely transfer them into games like Pokemon Sword & Shield.
However, today's news indicates that not every Pokemon is transferable, which has big implications for both fans who love specific Pokemon species and the competitive Pokemon scene. Unless Nintendo announces an alternative way to get certain Pokemon species (such as through Max Raids), Pokemon Sword & Shield might not have the capability to support every single Pokemon. What's more, unless Game Freak plans to release a new main series Pokemon game in 2020 that features a way to capture other Pokemon, it could be 2-3 years before every single Pokemon is available to be caught and/or used in a Nintendo Switch Pokemon game.
The transfer restrictions also likely mean that certain Pokemon won't be available for use in the official competitive Pokemon League. While past years have featured limits to which Pokemon you can include on your competitive team, this could impact the competitive Pokemon scene for years to come.
We'll have more news on Pokemon Sword & Shield in the coming weeks and will be compiling a list of Pokemon confirmed to be in the upcoming games.