Someone suggested Spec Ops: The Line. I'm going to have to disagree with that being a "horror experience." It tries harder to draw a surreal landscape, realism warped with fantasy, and along with this unreliable footing, it also shocks the player with realistic depictions of war and confusion.
Mark the verb 'shock.' The game really has no greater horror value in this regard than the cheap jump scares, where most of the player's reaction is going to be from a non-expecting perspective. If you frequent any raw-upload site, you've already seen all the tricks the game tries to pull (grotesque depictions their fall-back card), and so it becomes some sort of cheap parlor trick that hardly moves you. It actually becomes an estranged satire of war, almost a parody, that makes it as comical as it is absurd. No, the only horror you'll find there is if you're naive and haven't bothered to really investigate what people do under traumatic conditions.
That being said, it is an interesting experience that I do suggest one try. It just isn't a horror experience.
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Aside, I still find it incredibly interesting how many people are unseated and feel scared, uncomfortable, and untrusting whenever they play The Stanley Parable. It's definitely an experience I suggest people try, as it's a free mod using the Source engine. It seems most of the horror comes from having many elements of perceived stability ripped from beneath the player, and puts direct emphasis on whether agency has a role in determining events. And whether you, as a player, have any chance to really have a meaningful experience--both within, and without, the game.
It's a true experience that many games utterly fail to attain. And it's horror in the same way that the early Silent Hill games are horror: they transfix your human eye on unreal conditions that betray your empathy and rationality, and seat you instead in a dark, devouring place that refutes all semblance of naturality.