The original Silent Hill for PS1 is the most frightening game ever for me. The feeling of having no idea of why the main character is the city and school + hospital levels are incredible. Fahrenheit (Indigo Prophecy) is also a very atmospheric game.

Animal Crossing. The scariest thing about it is my brain actually turned off playing it. When I snapped out of it i couldn't recall what I was actually doing in the game.

The first resident evil games on the playstation, when I was a kid.
Sitting infront of a 50" tv, and pulling the curtains, and turning off the lights, sitting in the dark, as a group of kids playing RE1.

What made it terrifying?

this guy played a big part:

Also this.

Sneaking around the corridors of Sevastapol, trying to avoid the xenomorph and being insta-killed with no chance of escape if you were spotted was absolutely nerve-shattering and a masterclass in creating fear without the need for cheap scripted scares. Awesome game.

Amnesia: The Dark Descent. The only game that made me feel scared. Once you can fight back in a horror game, the part of being scared is completely gone.

Barbie Magic Hair Styler.

Never in my life have I witnessed such terror. The music. The graphics. The gameplay.

I used to play many horror games as a kid (ps1/ps2 era), however, nowadays not so much. The scariest I've played I think it was Silent Hill on the ps1. The atmosphere was brutal (thanks to the ps1 limitations), and the sense of not knowing what the hell was going on made the game really scary.
I've not played the game since the ps1 era, I wonder if it sill holds on.

Eternal Darkness on the Gamecube easily. The Sanity meter was genius and genuinely creeped me out when I first played it (especially alone at night!). I was also 12 at the time as well so things obviously scared me more easily.

EDIT: The only recent game I've played that scared me is Resident Evil 7 - the first person view was a very good choice and made you feel you were in that creepy house.

A love triangle involving a married woman...
Oh, and Silent Hill on PS.

Dang did you have a 50 inch tv in 1996?  That must have been expensive and very heavy!