Hello Lesser Blight Elemental and others!
I do agree with two fellow GOG users, jonridan and Vinry_., with respect to horror games.
Like jonridan, I think that the low-resolution and both pre-rendered and (early) 3D-graphics of the Playstation 1 did add a lot to the horror experience!
On the one hand, these contributed to the strange and never really identifyable appearance of features and things in creature and environmental design, which in consequence added tremendously to the feeling of uneasyness. Combined with an unsettling sound scape (the laughable B-movie voice overs excluded), that had its own share of not so well defined quality with lots of creaks and (random) noise, the ambience reached its heights.
Only later--when I had already played modern examples, but returned to old classics such as "Resident Evil 1", "Silent Hill" and "Parasite Eve 1"--I realized that the imagination feeded by the unknown (or the not being able to actually make out or identfy things) creates a much greater feeling of terror (or horror)!
Independent of games and movies alike, I found that most later (especially more 'modern') ones went in the opposite direction of displaying everything in utter detail(s), violence and lots of gore (blood). They are shocking, even disturbing, but only momentarily and often in form of 'jump scares'. However, they do not feel terrifying at all!
Add weird gameplay mechanics, the lack of consequences for the player and predictability, and they totally miss the point of being scaring for me.
Another not yet mentioned point & click adventure game that often works really well, because of not showing, is "Scratches". Unfortunately, it was removed from digital stores (including GOG.COM) years ago. It has its own faults of adventure game logic and puzzles. But the ambience and ambiguity it creates with very little effects is fantastic for horror fans!
For entirely different reasons, I like to second Vinry_.'s suggestion of the "Fatal Frame" ("Project Zero" in Europe) series. While their graphics are more well defined (Playstation 2 and onwards) than my earlier examples, its stories and folklore backgrounds carry similar aspects of the unsettling unknown. Furthermore, the gameplay enhances the terror, because it emphasizes and encourages the player to 'engage' in close proximity to the ghostly threats!
For those unfamiliar with those games. "Fatal Frame" (the games' title) originates from the fact that you are 'fighting' the ghosts with the so called 'camera obscura' by taking fotos of the enemies in first person perspective through the camera's lens. The "Fatal Frame" refers to taking the foto at a brief moment, when the enemy is starting a certain attack movement (animation). Usually, this happens only when the enemy is extremely close to the player! Hence, you get serious damage when missing this shot (very brief moment)!
The games emphasize the utilization of this "Fatal Frame" by not only increasing the 'damage' output, but also by connecting it into an additional special impact animation on the enemy and sometimes subsequent combo-capability.
Of course, they do use a lot of jump scares, as well.
From the story point of view, I prefer both the second and third installments, "Fatal Frame II - Crimson Butterfly" and "Fatal Frame III" (Tormented or Tormention, I do not remeber the subtitle right now). I found "Crimson Butterfly" more touching and terrifying for personal reasons. But "Fatal Frame III" was more haunting and disturbing in the long run, because it intertwines the fantastical and normal life throughout the game. In the beginning, both realms (the fantastical where you investigate the mansion and encounter ghosts, and the regular life in a normal apartment) are kept separated, but soon strange things start to occur in the normal world, too. Until the terror creaps in and disturbs your false safety within your (the protagonist's) own apartment and living space!
Maybe, I do like the "Fatal Frame" series so much, too, because each and every entry in the series has rather unconventional and controversial endings (yes plural: endings).
I found in recent years that it got harder and harder for me to feel actual horror by videogames. Either the developers do focus more on splatter effects and visual eye-candy, or their games are not capable of maintaining an (or a few) effective curve(s) of suspense throughout the playtime. A Constant bombardment with jump scares or disturbing imagery alone is not sufficient.
Individual sections within games that are not actual horror games are often more effective then so-called horror games. Take the haunted hotel level in "VtM Bloodlines", for instance.
Kind regards,
foxgog