I think Amnesia: Dark Descent takes the cake as far "scariest" horror games go. Playing that game at night, with the room's door behind you, is not a good idea. But my favorite horror game would have to be Resident Evil 4. The atmosphere that game creates is just perfect, and the enemies are varied and designed very well. The priests are my favorite NPCs in the game. The sounds they make are perfectly evil. And the boss battles are some of the best ever, despite the fact that the game came out practically a decade ago. There's just something about it that hasn't been replicated since, neither in subsequent Resident Evil games, or any other games.