I've just been sat playing Bioshock with my housemate Robbie. And it's absolutely scaring the crap out of me.
If you haven't played it yet, PLEASE go and download the demo now. It's a beautiful game, but what's more, it's frightening.
I love it when games harness some kind of emotion in you. That may sound stupid to people who don't really play games as much as I do, but games can have just as much, if not more, emotional power over you as films or literature. If a game can succeed in drawing you into it's world, like Bioshock does, then you're not just playing it, or watching it. You're experiencing it first hand. If something's scary, you can't just hide your eyes for five minutes. YOU have to walk down that corridor. YOU have to open that closet... I bloody love it.
Of course, horror isn't the only emotion that games will draw from you. Who didn't feel utter sadness when leaving Kokiri Forest and, more importantly, Saria in Ocarina of Time? What about when (*SPOILER*) Aeris died in Final Fantasy VII? And let's not even go into the 'emotions' Dead or Alive Beach Volleyball encourages.
But horror is my favourite. I remember playing Condemned on my 360 and being SO scared that I put Belle and Sebastian on full blast in the background to mask the screams and scary music of the game. I remember the absolute terror when the Hunters first made their appearance in Resident Evil and you knew that they were right behind you. Silent Hill (pictured) on the Playstation is my perfect horror game, though. It's creepy at times but it will also make you're heart race with every little thing it does. The music, the camera angles, the creatures and the bizarre storyline... They're all, for me, the best examples of horror and terror in video games. I finished it six times when it first came out. I can run through the game in about four hours these days, but the same things still make my skin crawl and make my hair stand on end. I love it to bits.
More horror, please! :-o