The real challenge with putting Horror in games, well, putting Horror in ANY storyline that follows one main character, is that you will never feel the true fear that they could die at any moment and the story would not be over. If you die in a "horror" game you understand that you can restart from a save point and attempt to overcome the challenge where you died previously.
The difficulty is tapping into people's fears, things that terrify, is almost as individualistic as fingerprints. There are books devoted to all the phobias that people have: agoraphobia, arachnophobia, claustrophobia, coulrophobia, hydrophobia, and so on. You can't make a story that will truly terrify everyone because different things scare different people.
The best storywriters have come up with is to focus on things that are inherently unnatural, and that really only is unsettling or creepy instead of being genuinely scary. Then they amp up the thrills by having things jump-scare you, which has been overdone so much that it's almost cliche.
There are only a few things that are almost universally scary; the dark/unknown, and things that could/want to kill you.
There's only so much you can do with that.