Essentially your mom/stepmom was into some black magic and sold your soul as part of a deal with a demon (she's part of the same coven you see throughout the last few films). Now, ol' spooky boi comes after you to collect.
In the meantime, your mom/stepmom is possessed and wants to rip you to shreds and feed your soul to the devil. This is probably in the video, but I only got a few minutes in before leaving for work.
You go around the house collection seven ritual items (collected in the book Abby struggled to get) and the game ends with you either failing and your sister becoming possessed or "succeeding" and...well, dying after the corpses of your family come and murder you. Honestly the ending is terrible either way.
I'm doing a terrible job of explaining as it's been a few months since I've played. The whole game is maybe 90 minutes to two hours long, so I'd really recommend watching a playthrough, especially if you're a fan of the movies.