Dead Space is easily in the top-5 games of this generation. The only gripe I have is that the plot (especially the crappy animated comics that appeared in PSN) is so-so and cliche. IMO Dead Space should be played at a higher than normal difficulty level, otherwise it's just too easy. The only difficult spot I encountered was when I had been careless with my ammo and ended up in a room where there was a duct/shaft and on the other side the aliens attacked a woman (great scene, btw). I didn't have enough ammo and had to aim super carefully, make every shot count *and* throw body parts etc. across the shaft to weaken the bastards!
Dead Space succeeds very well in creating an atmosphere of claustrophobia (especially when the shuttle was in flames and I was cornered), horror and fear. This is exceptional, because usually in order to make a game REALLY scary, it would require:
1. Worse controls. Seems that certain popular horror games are scary because their control scheme is clumsy and unresponsive (early Resident Evil games..). I'm currently playing Siren: The Blood Curse, and it's scary as hell because it's hard to see anything and hard to turn the character to face enemies when they are close. But Dead Space's controls are highly intuitive and smart.
2. A vulnerable feeling hero. Unlike Dead Space, Siren TBC has a very good script and plot, and of course e.g. guiding a little, unarmed girl out of a hospital filled with horrible possessed "zombies" IS scarier than strutting around in a space armor suit and a flamethrower.. Limited ammo also falls into this category, and that was quite well balanced in DS.
Dead Space did well in the xenophobia-department. For the first half of the game, I never did know what to expect so I advanced slowly and stomped to bloody pulp all the corpses I found, just to be sure they won't be coming back.. in one room I suspected that they will revive, so I dragged the corpses to great piles in room corners, so that I could easily toast them when they awaken. Too bad they didn't, except when I came back later and the game had returned them to their original spots
