const PUNCH := 0
const KICK := 1
const JUMP := 2
...
var player1_animation : int %What the player is currently doing
var player1_animation_frame : int %The frame of the animation
var player2_animation : int
var player2_animation_frame : int

loop
  (check to see if one of the palyers is dead)
  1.  check to see what keys are down (Input.KeyDown)
  2.  react accordingly. For example, if player 1's punch key is down and player1_animation is not= PUNCH, then cancel their current animation and begin the punch animation by setting player1_animation to PUNCH and player1_animation_frame to 0.
  3. Update both player's frames. For example, the punching animation would progress one step or the player would move forward one step.
  4. Update the player's health and position based on what happens. A punched player would get hurt and might fall down, for example
  5. Draw the background, health bars, timers, etc.
  6. Draw the characters.

end loop

View.Set("offscreenonly")

var keys : array char of boolean
var p1x, p1y : int := 50 % player 1's coordinates
var p2x, p2y : int := 200 % player 2's coordinates

proc DrawScene
    cls
    Draw.FillCircle (p1x,p1y,10,10,red)
    Draw.FillCircle (p2x,p2y,10,10,blue)
    Draw.Update()
end DrawScene

loop
    Input.KeyDown(keys)

    exit when keys('q') %quit when the player presses q
    if (keys('a') or keys('A')) then
        p1x := p1x- 5
    end if
    if (keys('s') or keys('S')) then
        p1y := p1y - 5
    end if
    ...
    if (keys(KEY_LEFT_ARROW)) then
       p2x := p2x - 1
    end if
    if ...
    ...
    end if
    DrawScene %now we draw everything
end loop