
I think the problem with survival horror is that it's always been a niche genre. The cost to develop AAA games would probably prevent big developers from venturing into this genre. It's all about shooters now. I enjoy the RE franchise, but I've also allowed myself to open up to different horror type games like ZombiU and Left4Dead for example. I actually kind of like Dead Island even though it's very hack n slashy. The genre is dead, let's face it. A genre about dead things being dead.
Also, HD isn't very kind to horror. Seeing everythin clearly gives away suspense, and the opposite, having everything hidden in darkness is kind of lame. I'm looking at you new Silent Hill and Dead Space.