Issue here is that horror games have just become first persion walking sims that are some of the best tools for gaming youtubers to get massive views and viewers themselves are always curious to see how the gamer himself/herself (especially this) react to the jumpscares. Everything is the same, just get some articulated scripted events that you never expect and there you go; or put in some creepy-looking location, generally an house, buildup to something crazy and unleash everything.
This is something that started since Amnesia and Penumbra, then re-invigorated again by Outlast, then by PT and finally RE7 jumped on this trend. PT also did its job trying to add new fuel to horror games and as such we saw a bunch of really shitty or promising clones (VISAGE so far fills the bill, definitely the most interesting horror thing since PT). Beyond those we're also getting some horror stuff based on "gross things" like Agony that are anything but scary - perhaps I'm not the target audience for this style. And if the preview didn't promise me anything decent already I won't waste time with the full game because it will likely not improve from what was shown.
Another issue with horror games is that they become dreadfully boring halfway through them. Because you end up discovering the mysteries early on and the devs didn't bother going beyond that with new subplots. Turns out RE7 is a victim of this
► Show Spoiler
as the last third of the game is NOTHING like the rest: it's some long shitty shooting gallery with no atmosphere and frankly RE7's regular enemies are horribly designed black turds and there's no variation whatsoever; they look funny, not scary, including the final boss and Jack's super form which somehow turns a really interesting character into an annoying wuss. The real main villain is also underwhelming and stereotypical as fuck though there's something cool about it you'll find out before the last boss appears.
I don't remember older Silent Hill games being also safe from the horror aspect going progressively downhill. SH1 had that weird clusterfuck of locations at the end of the game, SH2 had the hotel which I can't really recall in terms of unique things, SH3 had it possibly the best with all those really loud disgusting sounds played constantly. Other than that these games had a lot of disturbing scenes, events and symbolism that were very hard to forget and this is why they had always that permanently creepy aura around them in the way for the player to think "no I don't wanna go there anymore thanks". Which is why you don't feel these three games become more boring as you progress through them, any other horror game instead bother sitting on very basic plot foundations.
Think one of the reasons why I find RE pretty whatever as horror series go is that everything will be always of corporation's artificial origins. Maybe if it was RL, alright that'd be horrible but as a game this is ultra-predictable. No real supernatural shit going on, no fun, no methods to dip deeper into something scarier/disturbing. I'm one of those people who thought RE's peak in terms of scariness was RE1's first zombie encounter.
I don't think it's a good idea to copy Silent Hill if you want to do some ambitious new horror work, it doesn't seem to ever work. Now for example Outlast 2's demo made literally no sense with the school interlude all of a sudden (Outlast 1 had nothing of that weird shit and it worked decently enough) and this is what I mean with devs trying to inject SH-tier shit into their horror games/movies without some clear idea of what they're trying to do. Even if they had a good idea it still feels fake, depending on how it's presented.
I think what would awesome is using the SCP strat. SCP articles are generally independent from each other, the better ones aren't long and in few words they give you an idea of something seriously creepy and extremely dangerous. There have been quite successful free games based on the SCP content but they're part of the horror walking sim universe so I'd ignore them. Either way since horror games suffer from this decay issue I'd like then instead having a collection of short horror stories with possibly different gameplay style for each, and as well a different writer for each to avoid quick idea burning-outs. This style has been probably done for some TV series but for this one I'm gearing excessively toward more tryharding horror stuff and that's never the same between stories (THINK OF BASICALLY ANYTHING INSTEAD OF JUST MONSTERS) and not with always the same type of ending. If that does fail, I'd like to see then horror used as an unexpected sub-genre incorporated into something not exactly related.
I don't know if people may realize but when you play a game that already tells you "THIS IS A HORROR ONE" it kind of kills already expectations because you already know this shit you're playing or watching at will have scary bits and you are already prepared.
The best horror is when you are caught as unprepared as possible.