Something I'd like to see explored more in horror games is human horror. As an example, I just saw Children of the Corn for the first time, and the opening scene where some kids massacre an entire diner with farming implements
was positively terrifying to me. It was average people hurting average people in a way that was primal and brutal and fundamentally disturbing to me. One of my biggest fears is how much power any given person has over me- some random stranger I've never seen before could grab me on the street at night and cut my throat for no reason.
I want to play a game that explores that. A big procedurally-generated city, and the player's objective is just to run some errands- go here and here and here and then return to the start. And somewhere along the shopping trip you get attacked; not by anyone special, just another faceless NPC in the street. Like one big fucked-up game of Assassin.
Well, Pathologic kinda sorta does that. I mean, you can identify the muggers and looters by their different models, but they're way beyond your focus, and you can randomly encounter them as you're running through the streets or entering certain houses. Not to mention how combat against them can be very deadly for you and your resources are really limited. You constantly have to choose between spending money on weapons/ammo, food and medicine.
And speaking of Pathologic, it's sort of like a very subtle form of horror. It's not so much horrifying as it is disturbing, as a lot of the things in the town range from "Huh, that's creepy but possible" to "That's totally surreal". And that's before the plague starts, which is also pretty surreal in how it works.
One thing I thought was brilliant about the first Silent Hill was the radio. It warned you when there were monsters nearby without giving away where. It made you pause and look around, maybe even turn off your flashlight to avoid being seen. Of course, it probably wouldn't have worked without the clunky combat, and it often failed because of how you could just dodge and run away from most monsters. But still, it worked very well at first, and it sort of kept working in interiors (where you had to explore and not just run away).
Not to mention how it was a God-send compared to all the jump-scares in horror games. Which is something that annoys me more than anything. Of course you're going to react to a jump-scare. Any living being reacts that way to sudden quick movements. That ain't actually scary, that's just testing whether you're alive or not. Or possibly whether you're too bored and expecting them to react anymore.