Alone in the Dark: Inferno (PS3) I know its flawed with a bad script and shitty controls, but the innovation is top notch. Plus I am a lover of the original PC games from '91 that arguably invented the genre of Survival Horror. Also the original had Cthulhu and deep ones in it so it wins by...
I'm not sure if this counts but I will argue for it: "D2" on the Dreamcast.
It's a cross between J-horror and J-RPG, sort of what "Parasite Eve" should have been if it had better graphics and controls and was actually scary.
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