Eternal Darkness
Eternal Darkness may not be the scariest game on the list, but what it lacks in downright terror it makes up for in its unique gameplay mechanics and Lovecraftian inspiration. But what stands out as the most unique feature in the game is that Eternal Darkness thrives on giving players a pervasive feeling of dread–exhibited here with a unique “Sanity Meter” that constantly drains with every enemy encounter.
In this game survival extends far beyond just maintaining health, as allowing the sanity meter to dip too low will cause the games signature sanity effects to occur. These effects take various shape within the game; from subtle changes in camera angle, to unexplained happenings on screen, even to moments when the game attempts to mess with the player directly (no spoilers here, but make sure you check your save files often!)
Eternal Darkness succeeds as a horror game because it tries to do something different. It isn’t looking for big scares (usually, anyway), but it tries to reach a deeper psychological horror that exists within all of us. There is nothing scarier than the idea of losing your sanity, and not only does Eternal Darkness explore that theme–it builds an entire game around it.