The Three Act Exercise For Game Design

You're going to want a piece of paper for this. I like legal pads, but you'll definitely want to see the work outside of a monitor.

Divide the paper into thirds (horizontally).

Act 1
Act 2
Act 3

We're going to chart the basic player's experience (ideally) in-game. This isn't a strict adventure outline, so we can be fast and loose with a plot, but there need to be key beats each Act has.

Act 1 - This is all things creation and introductory. Players should in theory develop themselves (conceptually, and mechanically) and learn about the basics of the world. Immersion here is critical, as no one wants to play a game where the rules are either too vague, too restrictive or too discouraging (i.e. railroading). In story context, this is where adventure/campaign plots are hatched and world-base concepts ("the feel of the world") is born. Act 1 ends when the Players enter the most intense and forward-progressive drive in the plot.

Act 2 - Characters by this point are INTO a plot/campaign, and are developing forward according to their brought-in goals (things they brought to the table) as well as open-goals (things the game offers). Combat here is more common, and risk is also introduced. This is also the largest Act of play, generally being 1.5 or 2 times larger than Act 1. Should the game be episodic, serialized or weekly, it will be so because of a long Act 2 that offers either complexity (lots of small steps put together) or intensity (there's so much to do and it takes time) or potential (lots to do, of mixed length). Act 2 ends when they feel prepared to finish the plot or wrap up significant material in the campaign.

Act 3 - This endgame is the shortest but is often the most mechanically driven of all the acts. It begins when the characters make that final push towards resolution, and ends when the conflict(s) introduced in Act 1 are resolved. They may not, and need not be resolved in a way satisfying to the character, (although the player will be satisfied in all but the most power-gamer circumstances). Act 3 is also the only Act that bears a formula:

The mechanics/world-building of Act 1 + the plot-building of Act 2 = Act 3

Now, return to your paper and do some simple bullet points.

Act 1 - What sort of things will the players discover, both in terms of the world/setting as well as the individual plot? What sort of things do you, game designer want to deliver to them at the start of this journey for them? Refer often to any Feel Documents you have, as well as any mechanics you want to show off.

Act 2 - How does the plot unfold? Are they key discoveries the players have to make? Are there contingencies for when they don't? How much latitude is given to the GM to improvise? Are there clear boundaries for a GM to play within, that at the very least define the "feel" (There's that word again) and themes of the game, even if they eschew the presented material? Note too that this is where many GMs will fracture or diverge from plot to tell their own stories - is that encouraged? Is a structure (mechanically and expositively) in place for the GM to move the characters towards resolution?

Act 3 - How can characters reach this point? Once they reach this point, can they go backwards to Act 2 without penalty or a change in experience (note: the experience of the badguy defeating the heroes and them trying again later is NOT endgame)? Do the mechanics developed in Act 1 and tested in Act 2 support resolving the plot in Act 3? Does the story (plot-wise) present enough reward to justify moving forward and resolving the character desires? What happens AFTER resolution?

Whatever you put on the paper is yours, and is subject to your change at any time, so there's no danger of being wrong. Likewise, you don't have to worry about missing material or "not thinking of something", because that's what playtest and homebrew rules are for. For now, focus on mapping out the experience, according to the ideas, theme and goals you want players to discover and worry about the finer points later. (Yes there are substantial finer points ahead, but that's what other pieces of paper are for.)

Start there. Happy designing.