I think that psychological elements are important, and a good story with tons of depth can make or break a good game, horror or otherwise.
The main difference with horror is that everything doesn't have to be completely opaque, many elements are left up to interpretation or don't have an exact answer. I like games or stories that leverage that feeling of the unknown, or the incomprehensibility of reality.
For the past few months, I have been designing an indie survival horror game that should be completed soon. Once it is done, I plan to release it on
https://itch.io/ for everyone to play.
I gave it a SOMA like atmosphere with Slender: the 8 pages like game play, because I loved these games, so of course they were a huge influence.
Rather than have cheap pre-planned jump scares or filling things up with tons of gore, I decided to go with more of an organic approach, reminiscent of the way alien isolation works, were the enemy will just be constantly looking for you and might find you in seconds, or in minutes.
The game I am making is called Red Dusk Ridge.
https://happy-killbot.itch.io/red-dusk-ridge
Would anyone be interested in this type of game or have anything that they like to see in horror games?