I've now completed Limbo over the span of two evenings, and I can safely say that Limbo's one of the best games released this year.  Go buy it now. 
 
Beaten it?  Good.  It's easy to say that Limbo is creative, atmospheric, clever, funny (in a rather morbid way), but it also struck me in a way that most games don't: it's actually scary.  Even playing it in a room full of people I felt on the edge of my seat, scared that at any second a monster or obstacle would come out of nowhere and kill me (which they often did).  A tricky platforming section was massively unnerving, making me wonder if I would be able to complete it, and the gruesome ways the main character can die only add to the intensity, which can not only be entertaining for some, but a way of punishing those with weaker stomaches.  Sadly, the death animations are undermined somewhat later in the game, when trial & error is the only way to figure out a solution to some puzzles.  Yet the game retains its dark side and intensity despite constant auto-saves that drop you nearly where you left off. 
 
So why does Limbo succeed where so many other "horror" games have failed lately?  Resident Evil 5 had some gruesome monsters, but the game itself was never scary; the inventory restrictions were more of an annoyance than a frantic "take what you need only" mindset.  The cutscenes were laughable, and a lot of enemies were just ridiculous.  Everyone agrees that Resident Evil 4's scares were much better, considering the constant feeling of being overwhelmed, and a particular favorite of mine doing nothing but making creepy sounds the whole time.  You know he's there, but you have no idea when and where he'll attack; that feeling of helplessness is what makes horror games shine. 
 
Still, "horror" and "scary" can still be entirely different.  If you remember, Doom 3 was praised as being scary, but it was a very artificial scare; monsters would hide and pop out at you and ambush you, and after the player's initial jump, a bit of fridge logic sets in: why were those mindless monsters hiding there in the first place?  It's the equivalent of your friend popping out from behind a door yelling "ooga booga booga".  A good horror game will screw with the heads of players, such as Eternal Darkness for the Gamecube.  As you play, you'll notice that on occasion, something in the room just doesn't seem right, and the realization sets in that you're playing a fabrication only draws you in further.  Though, that game made the mistake of letting you see your sanity meter, thus giving you advance warning of when things are going wrong. 
 
It's a bit coincidental that this week's "Extra Credits" on The Escapist also talks about horror games.  One point he mentioned stood out, and it's about a game I've mentioned several times in this blog without actually going into it - Demon's Souls.  Demon's Souls can be considered horror in a very peculiar way; due to the way the game is set up, death is a huge punishment, costing you a great deal of playtime, as well as hitting your inventory.  As a result, when you play Demon's Souls, you're extremely cautious.  You take a peek around every corner to make sure nobody's going to ambush you.  Each new enemy is treated as if it's an elite soldier, and must be carefully studied before it is engaged.  And of course, sometimes the game requires you to take a leap of faith in order to progress, as the player bites his lower lip in anticipation of failure.  It's a kind of tension you don't see in games much these days (although Demon's Souls could go a bit easier on the player at times...). 
 
A good horror game can be especially unnerving and moving, and much more memorable than most run-of-the-mill action games.  Unfortunately, it's difficult to pull off right, which is why we don't see much of the genre.  Still, if a very simple XBLA download can get me on the edge of my seat, there's no way the genre can be dead.  Or, undead.