Gaming Horror Concepts

I've had heaps of ideas rolling around my head for the past three years or so in regards to a horror game I'd love to produce, had I the resources and assets to do so.

One day in the future it may become possible, but I'd really like to get concepts, mechanics, and the general story down and worked out long before art or coding becomes an issue. A few weeks back, after some pressure from a good friend, I created a sub-domain and installed a CMS so I can start writing out ideas, rather than just talking about them over Steam and Skype. I've been lazy over the past couple weeks, so really haven't finished getting all the features I want working for the CMS.

The goal for the sub-domain is writing down all the ideas, concepts, mechanics, what have you, and having a select group of people provide their inputs on the content, so ideas can be matured/fleshed out in line with the overall goal of the project. I plan to keep this system pretty controlled, as I'll also be discussing story elements, which I don't want to get out in the open...

So now that I've rambled for at least two paragraphs, I have two questions for the Polygon community at large.

  • What is everyone's opinion on open world psychological horror? By that, I mean access to a city in which the events unfold, although plot events may mostly take place inside structures.
  • What horror elements do people think work well or do not work well in video games?

Some things I've been entertaining:

  • An implementation of a 'sanity meter' (although the level of sanity may be hidden from the player, rather than being part of the HUD/UI) with sanity effects more akin to Eternal Darkness, rather than blurring on the camera.
  • I had also considered and started working on a spell system, similar to Eternal Darkness, but ended up scrapping it as the concept of magic didn't mesh with the story well at all.
  • Real time progression: Time flows in the game either in real time or at a slightly accelerated rate. There will be player triggered events that may allow time to skip ahead (sleeping, seeing a psychologist, etc.). Time will be important in the sense that overall events will progress while you're loitering on the sidewalk next to a pub. Essentially, things will get worse in the character's world as time progresses towards a set point.
While I'm not going to get into elaborating on the story, it may involve exaggerated aspects of things found in the DSM-IV with a big side of the supernatural.