Monolith Productions developed a love it or leave it title for the launch of Xbox 360 last year by the name of Condemened: Criminal Origins. While some loved the eerie presentation, others couldn't get past the slow melee combat. At the same time, and using some of the same development tools and ass...
Check out Six Days in Fallujah. Procedurally generated levels and the AI is super aggressive. They react to mic chatter and flashlights and they will flank your ass immediately
I’ll never forget I got this game around when it came out, which made me about 11. For some reason I was too stupid to realize this was a horror game based on the name and cover. I just read, “First Encounter Assault Recon”. The first jump scare had me panic unplug my ps2. I later worked up the courage to beat the whole game, which ended up being one of my favorite gaming experiences and got me into the horror genre. I go back and play through every few years on GoG.
If you're more into shooters than horror games, I can mildly recommend f.e.a.r. 3, partly because I happen to hold the world record in the coop speedrun. It's an ok game, though the community likes to pretend it never existed because it's really more of a shooter than a horror game.