Sorry for necro'ing a dead thread but I wanted to discuss some of the stuff jim mentioned because I would love to see a horror RL that is procedurally generated.
You would have to be an artistic genius to make this work.
Then again, maybe you ARE an artistic genius.
You will need to be a complete master of the minimalist aesthetic in order to make letters on a screen scary. Don't get me wrong; I understand that ascii games are powered by imagination, but it's a fanciful, surreal sort of fantasy offered by the roguelike toolset - not anything gripping.
There's also an inherent problem you will have to overcome in that a major part of fear is the "what is it" factor, and roguelike players are inundated with that question from start to finish anyway. The "what is it" factor is de-mystified in roguelikes.
Another integral part of the experience of fear is immediacy. There can't be this comfortable distance between the @ and the player. How do you overcome that?
The turn-based nature of most roguelikes is also a handicap.
What you will need to do is make the familiar (the roguelike tropes) and make them unfamiliar. That's the key to good horror. For instance, what if you were wandering around in a grey room with grey little g's that you killed and looted, then, as you suggested, were confronted by a crimson Q... most players would take a moment to stop and think. What if the Q suddenly moved between turns? THAT would get a player's adrenaline pumping. But to procedurally generate fear.... hah, like I said, you'd have to be a genius.
I suggest watching David Lynch films for a while.
First I wanted to point out, the limitation of RL's applies to all genre's, not just horror. Yet a good few of RL's manage to overcome those limitations. Why do some of the more famous RL's not get boring after a while? Usually because there is plenty of entertaining stuff to do (in the case of DF) or a tough and interesting challenge. (nethack or ADOM) I think this can be done for a horror RL too, but it's going to be more of a challenge, more so than making other types of games.
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although I'm sure you already know this jim, I'm just pointing it out for others)
But back to the horror. Yes, horror is very different type of game compared to the others and for many reasons. Jim made a lot of good points. Most horror games lose their 'scare' factor once you've seen the scary cutscenes or died a few times to monsters killing you. So I feel like the biggest issue here is this, can one make enough procedural generated content/environment/items/etc. so that it keeps players guessing? I think music is a MUST for any horror game. I think it would also be fine to add procedural generated music to certain parts. (like a static noise, muffled noises, creepy sounds etc., but probably not so much for background music) Setting up the environment is a biggey too! Knowing what amount of lighting to give to certain areas (or any light for that matter) really tilts the fear factor.
Now as for game structure. Turn-based? Real-Time? Or a mix of the two? (have x-amount of time to make a turn) As far as that goes, I think the developer would need to try out all three to see which is more befitting.
One idea I had was something along the lines of "The Thing" in sci-fi space station/ship setting. (note this is almost exactly like the game Space Station 13's - changeling mode) You start out in a procedural generated station with a human crew: engineers, scientists, medics, security, assistants, and so-on. They all start slowly being killed by 'it'. As people start dying parts of the station/ship start to fall apart from lack of maintenance. Engineers die, the engineering section is caput causing the engines to go offline which results in huge power loss. (no more lights, life support, machine power) Medics die, higher rate of fatalities. Security members die, more danger on the station. Assistants die, less stuff gets fixed. As the station slowly starts to decay it provides a more hazardous environment to your character. Most of the hazards create the mood for a paranoid, "shit, fuck. Im-going-to-DIE", state of mind. Which would go along nicely with the terror of 'The Thing' hunting down crew members and killing them one by one. I might actually try to make this later, probably not for a long while, at least until I finish my current project.