I think that would come to The Seventh Guest for me. Gameplay wise, it was all about solving puzzles in order to progress through the mansion, but it was the first game to make extensive use of live-action video, and one of the first games that really pushed CDs as a necessary medium. Not only was it too big to fit on a series of foppies, they actually had to use two CDs to fit it even with the pioneering work they put into video compression.
As for it's horror elements, the story was about a homeless man who murdered a woman, and then starting having visions of toys. He made the toys and they became very popular, but then kids with these toys started dying from mysterious, incurable diseases, and the man disappeared to build a mansion that he was seeing in his visions. After a long period of reclusiveness, he invited six guests over to his mansion to stay the night and try to solve the puzzles around the mansion. Long story short, the list of activities the guests part-take in is larger than just solving puzzles.