I think the interactivity of games makes it hard to keep the right mood, pacing, atmosphere, etc. that horror stories rely on. Horror games are still developing their own language and tricks to manage the feeling of horror in an interactive setting (like the use of puzzles to draw attention and focus, then interrupting with a scare or threat of some sort once the person is mentally in "puzzle mode" and not thinking about the horror aspects of the game).
Also the genre is heavily influenced by trend-chasing, specifically mascot horror (like FNAF), PS1 throwback horror (like PuppetCombo's games and their influence), and the general trend of games that seem like they were made to be "streamer-bait" first and foremost.
I think the interactivity of games makes it hard to keep the right mood, pacing, atmosphere, etc. that horror stories rely on. Horror games are still developing their own language and tricks to manage the feeling of horror in an interactive setting (like the use of puzzles to draw attention and focus, then interrupting with a scare or threat of some sort once the person is mentally in "puzzle mode" and not thinking about the horror aspects of the game).
Also the genre is heavily influenced by trend-chasing, specifically mascot horror (like FNAF), PS1 throwback horror (like PuppetCombo's games and their influence), and the general trend of games that seem like they were made to be "streamer-bait" first and foremost.