Monolith Productions developed a love it or leave it title for the launch of Xbox 360 last year by the name of Condemened: Criminal Origins. While some loved the eerie presentation, others couldn't get past the slow melee combat. At the same time, and using some of the same development tools and ass...
If you're more into shooters than horror games, I can mildly recommend f.e.a.r. 3, partly because I happen to hold the world record in the coop speedrun. It's an ok game, though the community likes to pretend it never existed because it's really more of a shooter than a horror game.