Yeah, Silent Hill is easily the scariest game I've played though if you tried it now, it probably wouldn't work as the graphics would seem too poor.
I can't remember the story but it didn't rely on gore or things making you jump like Resident Evil, it was the atmosphere. You were alone in a small, deserted (you think) town looking for someone (daughter?). The town is thick with fog so you can't see far at all. If I remember rightly, the fog would subside until you hear an air raid siren then it would go thick again, putting you on edge. You soon pick up a radio that starts to crackle just as some weird flying creature smashes through the window of the building you're in (ok, that bit makes you jump). That radio is critical in building the tension as it crackles whenever something is near but as you're in thick fog, you don't know the direction so it's easy to literally start panicking when you're playing.
Later in the game you walk around inside an empty school building until you go into (I think) a clock tower. When you come back out it's the same school but it's changed dramatically with blood and entrails smeared all over the place. That's the big 'wtf' moment.
I guess it's hard to picture if you've never played it but I used to sit in a dark room playing it and my heart would be pounding.
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