I think hard to tell what stage you are in. Do you know how many modes you will use to present the story and to implement the gameplay? If not, you could list them and see whether the list has the desired balance, variation or coherence. When you list each segment, you could also mark it duration.

Example (1 chapter):

Story:

The main character duo arrives at a town where children are going missing. Town folks say that something evil in the forest is kidnapping the kids. The main characters go to investigate.


0.1 [Cutscene] Intro (3 min)
0.2 [Shopping/Exploring] Shopping and preparation, optional exploring to gather additional story details, saving (1 min to as long as player desires)
0.3 [Combat/Exploration] Evil forest (3 min)
0.4 [Combat/Exploration] Evil castle (3 min)
0.5 [Maze/Puzzle] Optional puzzle inside the castle (1 min to infinity)
0.7 [Combat] Boss fight (3 min)
0.8 [Cutscene] Victory and reward (3 min)
0.9 [Free] Exploring, shopping, fighting, puzzling, saving, (1 min to infinity)
1.0 [Cutscene] Conclusion (3 min)

You could still have dialog interpersed. So a "Combat" segment is not mute.


If you already have such a list of have that idea, you could list the minimum graphical and audio resources you need to complete the game. By resources I mean sound effects, music, background image, sprites, GUI graphics.

The example above would have these resources:

SFX:
- Blunt hitting
- Magic casting

Music:
- Boss fight
- Ending theme

Agent Sprites:
- Main Characters x2
- NPC x2
- Town folk x3
- Minion A
- Minion B
- Minion C
- Boss
- Crowd

Other Sprites:
- Castle lever
- Castle heavy door

Environment Sprites:
- Dock set (Morning)
- Evil Forest (cloudy)
- Castle Courtyard (Dusk)
- Castle Interior (Night)
- Castle Boss room (Night)
- Dock Set (Night)

Bla, you wrote:
>I don't know if this would be considered the back story or what.

When are you planning to figure that out? (^_^) I think it'd be pretty important for you to know this.

>What should I do next?

It depends on your ultimate goal. What should you do, in order to accomplish what? If you're just doing this for practice, then you can do whatever you want to -- keep on working on this story in whatever form you want, or go write another one.

>Should I take each paragraph and break it into scenes like a movie or break it into levels and explain each level?

You mean cutscenes to be displayed between levels? Sure, you can do that if you want. (Then you'd know which parts of what you've written so far is back story, and which parts are to develop throughout the progress of the game.)

>break down how the game functions

Why? Are you designing a game? If you're writing a game design, then obviously you need to do this.

>and make a summary of the story of the whole game into a paragraph?

That would be a useful exercise, yes. Every game designer has to be able to write a one-sentence, one-paragraph, and one-page description of his game (in addition to a full description of the game).