|Or this guy. He's scary enough.|
The best horror games use your mind against you. They make you scream like the little sissy you are over nothing. They make you question your sanity, hide under the sheets, and turn you into an insomniac for a week or more.
Modern games have quite the foundation that they've built upon. Silent Hill Downpour, for example, is riding on the shoulders of one of the best ps1 and ps2 era horror franchises. Actually, Silent Hill 2 and 3 are both must play games if you consider yourself a fan of survival horror games. They are getting a re-release on the PS3 and Xbox 360 in HD, and are well worth the price point.
However, it's difficult to say that modern horror games adequately live up to their predecessors. Resident Evil 5, for example, makes good use of the teamwork mechanic, but it doesn't necessarily seem creepy. Heck, I still get chills when I hear the labored breathing from the regenerators in Resident Evil 4. They're creepy, they can kill super fast, and the f***ers jump from across the room when you least expect it. The Kijuju don't bug me nearly as much, and I don't get nearly as frightened by RE5 as I do the earlier iterations.
There's something to be said about Nemesis busting through a brick wall about to kick you arse across Raccoon City. The sudden urge to run and hide, try and evade him because your weapons won't even scratch his skin. That feeling of helplessness is lost in RE5 and some of the more recent horror games.
Fatal Frame, another PS2 era horror game, blended a fantastic story line with an atmosphere that left you lonely and in a state of "me vs. the world." They're tough games, too. You have to go to first person view on this old camera to "capture" these spirits. It's a unique mechanic and I like the gameplay options it opens up.
Probably the only recent game that actually lives up to being "true horror" would be the Ju-On: The Grudge for the Wii. Even then, the game does most of the work for you, and relies on the meowing white boy jumping out to scare you. It's not even that great of a game. Believe me, I've played it. You're really not missing much.
So what can horror games do to fix this plight? The answer is actually pretty simple. Flesh out a story and gameplay that really gets under the gamer's skin and gives them the chills. Amnesia: the Dark Descent is one game that does that well. This is a game that made Sean "day" Plott scream cold blooded murder over an unlit torch. This video, in 4 parts, is hilarious to watch.
Honestly, I wish more horror games played with my mind. The human psyche is easily confused and manipulated, and more developers should take advantage of this. If more developers heard from more of their fans, they'd definitely listen.