Ghosts aren't scary — annoying maybe, but not scary. Not in any practical sense anyway. Maybe I'm weird, but the things that terrify me are things that exist: human evil, more than anything. And maybe big lizards.
Wouldn't logic dictate that the scariest thing is something that exists? For example, the thing that scares me in the middle of the night isn't the boogeyman or that girl from The Ring, but the idea of a person breaking into my house, with unknown intent. People are scarier than any ghost or demon, simply because people exist.
So why is it then that just about every horror game revolves around ghosts or other supernatural scares in some way?
You'd think that with so much hype and hyperbole over game violence — and game developers being more willing than ever to utilize serious and brutal violence — that there would be some horror games based on the simple but terrifying premise of people doing bad things to other people. Some games come close: BioShock is an example, but even that games cloaks itself in a realm of fantasy. I would like some real-world fear — something that doesn't go "boo!" but instead hits us in a more subtle way.
One of the scariest movies I've ever seen is Henry: Portrait of a Serial Killer. It portrays a man who kills not because he gets a thrill out of it, but because it's a way to relieve his boredom. It features an infamous scene where he and his partner break into a family's house and murder them. This scene alone is more horrifying than any supernatural demon or ghost could ever be. Because it's happened, and we know it's happened.
Games seem to take another approach entirely. The closest I've seen any major title come to approaching this style is Heavy Rain. It uses a dense tone and lonesome atmosphere to create a perpetually bleak sense of place. Though the game is not in the horror genre — it's more of a thriller — it could have been. I would love to see a horror game like Heavy Rain that relies on plausibility and tone. Right now, we mostly get loud noises and spooky creatures that are more at home in a Halloween maze than anywhere else.
Maybe it's because people percieve the medium as pure entertainment and empowerment, but personally, I don't think horror should always be entertaining. Sometimes it should be traumatic, and it should be unpleasant. It should be horrific. A scare shouldn't make you jump in your seat and make you giggle afterwards, it should make you feel uneasy. Fear is an unpleasant sensation, and people seem to forget that.