That sounds and looks much more promising!
Obviously one could go for a no combat Amnesia style horror game but I think I'd prefer a Blood + Amnesia + Resident Evil crossover style of gameplay.

Well, that could be done too, but this way player will be able to kick monsters ass, so there should be a bunch of monsters, that's what I don't like to do. Or I could create some smaller enemies, which can die without any affect on the story line.. I need to think about this.. But all in all, I guess this has more potential than creating another WWII game, there are too many of them out there.

I would not choose for pure horror, cause there are already alot of those games recently (all those Amnesia clones) and is kindy difficult to do when you can only see a few pixels (= less scary). But some mix between action and suspense/horror sounds best. Perhaps something like the old Aliens vs Predator game (when playing as a marine) but with monsters instead of aliens and pixellated?

Maybe this give you some ideas (when doom and avp get a child): http://www.moddb.com/mods/acm-2014

So make it so killing monsters isn't just a matter of pointing at them and clicking. Like Dead Space for example invented the whole strategic dismemberment thing, so suddenly one bad guy is a more serious problem since you can't just shoot at it, you have to aim at each of its limbs and knock them out one at a time. It's more complicated and it's new and fresh, and therefore it is fun.

And I'm not saying you should copy *that* design directly... but you should try being more inventive with your gameplay first and foremost before you put effort into settling on an art style.

Bioshock went through a ton of revisions in its visual design before they settled on the underwater city theme. Originally it was going to take place in a nazi bunker. The one thing that stayed constant through the game's development though was the Splicer -> Little Sister -> Big Daddy thing. They took that design and made it a huge part of the game from the beginning. So you need to think of interesting concepts like that before you try to imagine what kind of weird settings your game should take place in, because it's not the art style that makes the game, but the game design.

Since you guys have been talking about Duke Nukem 3D and Doom and stuff so much in this thread I thought I'd share this with you guys:

[yt]https://www.youtube.com/watch?v=HQYsFshbkYw[/yt]

It's an explanation of how to make a 3D engine with the same basic functionality as Doom or Build. The engine is software based so you get to see how the most fundamental steps of rasterization work as well. I hope you guys enjoy it!