Horror games rely too much on just the visual part of the senses. More often than not it also tries too hard playing the "humans fear the unknown" spooky lore type shit.

Put as much equal focus on the other senses. Audio. Ambience and the works. Even touch if you can somehow masterfully script a controllers vibration.

Fear of the unknown is just one thing people are scared of. Losing your own mind is another, make the player (not the character, no the player themselves) feel like theyre going crazy. Play into paranoia, audio and visual hallucinations. Make them tremble at the thought their mind is failing them to the point where they legit might be scared they will develop schizophrenia if they keep playing. Make em feel like alzheimers/dementia patient who just got lost and doesnt know where or when he is.

Shit like that.
You can only do so much with scary looking creatures and encounters of "unknown paranormal/cosmic force"

Like fuck did no one realize body horror is not what made The Thing a masterpiece horror film but the paranoia aspect?
It seems modern horror games only saw the monsters and were like "Oh so thats what we need to do! Write that down! Ok we got our formula!" And then left the theater before the movie finished