Square Enix made a very smart move in the design of Nanashi no Game. The DS isn't exactly the best system for creating an immersive environment conducive to horror, so they've created a scenario in which the game system itself is, both inside the game and in real life, a frightening element. Most of the game puts you in a 3D environment, but the use of a "cursed" mock 8-bit RPG allows you to experience some of what the main character is supposed to be going through all by yourself. And that helps force you into the 3D game world, where you will find the RPG basically chasing you around.
We have no idea how effective this design will be in the final game, but it totally works on video.
