Ah well... sorry for the short answere, i had not much time yesterday.
The graphics are not the reason for that.
Sure, pretty is something else, but i wouldn't mind graphics much if the gameplay and athmosphere would be good.
I like all these old 80s horror and slasher movies like Friday the 13th, Nightmare on Elmstreet, Halloween etc. but i don't see much of it beeing transported in that game.
To me it seems like a voyeuristic kill simulator and not even a good one like Manhunt.
I really like the idea of beeing the bad psycho killer guy, because it's something unique that hasn't been done before a lot.
Judging on what i see in that trailer, the gameplay simply lacks stealth elements such as hiding in the shadows, waiting for the victim and don't be spotted early on or by other npcs.
These are things other games have allready done very successfully.
I'd say the game cannot create a horror experience because you are the one that brings the horror.
Here some suggestions:
You should be able to do lots of things like cutting off telephone, disdable lights, lock certain doors, write messages in blood etc. in order to scare the victim and lead it into your trap.
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Just a situation that might occure during the game: (caution, psychotic content)
You went to a house, the victim watches TV in the living room.
You need to get the victim to the bedroom upstairs (a "mission briefing" will introduce you to all the possible killing areas of a location).
If you cut off the electrics right now, it would be affraid to call the police, so you cut the phone at first (if you're a clever killer).
Next you need to make sure that the doors are locked or blocked so the victim cannot leave the house, so you need to go in there and get the keys without beeing noticed at all.
After that, you should prepear the bathroom mirror or some walls with your blood messages and make sure that there are no objects the victim could use to harm or spot you e.g. remove the knife from the kitchen, take the flashlight from the table behind the couch.
Now it's showtime, you cut off the power. Lights go out (luckly you're able to see in the dark) TV is dark. The victim tries to find the flashlight, no luck, so it's easier for you to hide.
Don't make any noise when the npc is near you, you don't wanna let it know where you are, till it's to late. (still could run away into a unexpected room and block the door)
The victim found a photo camera and will use the flash to find the way to the fuse box.
Luckly you knew that and prepeared the door to that room with a big "you will DIE" message.
Now the victim is affraid, and tries to call the police. Phone is dead (if you did not forget to cut the phone line).
Getting more affraid, tries to get out of the house. But you locked/blocked the doors (did you? all of them?).
Now it's time to show yourself to scare the victim even more. Hunt the victim upstairs till it locks up in the bedroom. Hopefully you wrote the message on the bathroom mirror, or the victim will lock up in the bathroom where you cannot reach it and you didn't forget the unlock the window of that room so you're able to get inside there from the roof.
Now you might see a cinematic sequence, maybe with some QTE, too (depending if you took the knife from the kitchen or not and your victim isn't defenseless).
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As you can see, i'd focus a lot less on plain killing and a lot more on adventure stuff like collecting items, interacting with the enviroment etc.
This might be even possible as a point & click adventure, but also as a First or Third person adventure.
However it wouldn't feel so plain and offensive as it is right now and possibly could deliver a good thrilling experience.
I could also imagine "missions" where you have to get rid of several victims but have to split them up at first to make them more vurnerable or have to hide from the cops because they'd kill you with their guns on sight.
...