Of all the games I've played I think probably Dead Space is the one that nails it better. Solitary, scary and opressive.
Typo - In the title instead of "was" should be "has".
I've really enjoyed the atmosphere in Skyrim. When you're out there hiking through the countryside and the snow starts coming down... it's just something beautiful, and you really get captured. There's always this great sense of freedom, and to me, that's an interesting kind of atmosphere versus the more traditional examples of oppressive or depressing atmosphere.
On that note, though, I definitely think Amnesia: The Dark Descent, the original Silent Hill, and Bioshock had brilliant atmosphere. I might throw Portal in there, as well.
Metro 2033 and STALKER are both great post-apocalyptic atmospheres
Bioshock at times made you feel like you really were in a city under the sea that has gone mad
Alan Wake was rightfully creepy in spots
LA Noire was pretty good
Deus Ex and Syndicate both achieve that futuristic aesthetic really well
I don't think it would cut the mustard today, but a decade ago, System Shock 2 was very atmospheric. Not just the visuals (for the time period) but also the sound. The PS2 game, Fatal Frame II: Crimson Butterfly had a very spooky vibe to it, too.
I'm not a fan of horror or scary games usually, so I liked the colorful but ruined setting in Enslaved: Odyssey to the West. Fallout 3 was too bleak looking, but Enslaved was bright. It reminded me of the outlands in the movie, Logan's Run.
Amnesia builds an atmosphere like nothing else. Bioshock is decent too but doesn't really maintain the atmosphere throughout the entire game. I'm trying to think of an example nobody else has used but I've got nothing...
Anybody said Condemned yet? That's nearly on par with Amnesia. I think I remember The Suffering being tense as shit too but I might be recalling it incorrectly.
My personal favorite is probably Vampire Bloodlines. But Bioshock does it really well, Fallout does as well, Dark and Demon's Souls have good atmosphere, Ico, Shadow of the Colossus, Condemned, Amnesia, Penumbra, Alan Wake, Silent Hill 2, Mafia....
So many games man, I almost exclusively enjoy games with a good atmosphere, even if the gameplay is borderline bad.
I'd throw Shadow of the Colossus out there. There's a point when you notice how beat-down the protagonist is looking, clothes ripped up and stained, face sunken in, and you realize that he's killing himself fighting these things to bring the girl back. It's an impressive feeling of loneliness.
Also Silent Hill 3. That game mixes abandoned, quiet environments and oppressively hostile Otherworld sections pretty much perfectly, and props have to go to the music for always matching the situation at hand. It's marvelous how well that game manages to get you into Heather's head, setting you up for a real knockout punch a few hours in...
The Condemned series absolutely nailed it. WHERE IS CONDEMNED 3 MONOLITH!! WHY ARE YOU MAKING ME WAIT!!
Silent Hill 2
Yoshi's Island (it really looked like a place yoshis would live, it made sense, baby mario is fine)
Demon's Souls, I fucking love that game, but when I first started it I played through 1-1 and then I didn't play it for weeks because I was so afraid to die. I'd start up the game, load my character and then you stand in the nexus for about 10 minutes before I just turn it off again. I did finish it in the end though...
Champions of Norrath has some of the most amazing sound design I've ever heard in a video game. Besides amazing weapon and enemy sounds, awesomely atmospheric music and pretty good-quality VO, the ambient sounds just put the game on another level of quality. Every level of detail was covered with amazing care, so much so that the locations and times where you're in absolute silence are a noticeable design choice in their own right. Truly a game worth noting.
In the spirit of not just listing all the games that have been listed (I agree with all of them so far), I'm going to throw Diablo 1 out there.
That game did a great job of giving you a feel of just how fucked of the Tristram Cathedral had become with each level you descended.
Dark Souls. No other game brings about such heightened levels of tension and terror to peek your head around a corner for fear of losing it. Not to mention, it is also extremely beautiful while doing so. It truly is the greatest dungeon crawler survival horror game ever made.
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