One of the earliest D&D settings I got into was Ravenloft. This was back in 2nd ED, when D&D cared a lot about flavor, and the gothic horror setting had flavor to spare. It had some impressive whiffs as well, but the Van Ricten's monsterhunting guides were generally great stuff.
However as a game... it didn't quite work out. D&D characters are more magical strike teams than heroic but frail investigators, and most editions weren't designed to allow the play that the Guides suggested without a lot of DM fiat.
One of the tools Ravenloft tried to use to integrate the horror setting into RP was Fear and Horror checks. Something that several other game systems have implemented as well! And all of them (that I've seen) have sucked. Completely terrible. Madness some games manage (sorta), but that's possibly the least important.
And so I've decided to take a crack at a better system of Fear and Horror. Game systems that try to steer gameplay in the correct direction, without totally overriding roleplay or becoming crippling messes. They're easiest to work into most D20 systems but should be good for a lot of simulationist games. (Except 5th ED because 5th ED D&D is the worst and nothing works with advantage / disadvantage.)
These systems are designed purely for Ravenloft, and as such are tailored to impact play in ways that create the 'gothic horror monster hunter' atmosphere. While the ideas here can be pulled in for other games, it's important to remember the goals of the mechanics and not just make assumptions based on the names.
A Ravenloft game arc focuses on confronting and defeating a monster. One that's a terrifying threat against a party that doesn't know its weaknesses, and a lesser threat to a party who's properly prepared. As such the suggested gameplay style is to have the party encounter the monster and usually flee, or at least force them into a purely defensive setup. They then investigate the monster, through legends, rumors, and occasionally horrid locations. After they learn the monster's weakness (or fall for a red herring) they plan an attack that succeeds, or if they fail, retreat and try again later.
One problem is that most combat games are designed to prevent the players from retreating. Because if retreat is easy, kiting becomes easy, and designers don't like that. So there needs to be a system to patch that.
Another problem is that it's hard to force people to roleplay being off put by horror. Simulationist players are used to ignoring penalties and pushing through. And even experienced roleplayers can use a cue to see when RP is going into 'group sabotage' instead of 'reasonable reaction.' And players and GMs might disagree on where that point is. There should be a system to help smooth those edges a little.
Which leads to our two replacement systems.
When the situation is FUBAR, when your best attack just failed, when the enemy popped out of nowhere and crit the paladin for 3/4ths of their health, that's when Fear comes in. Not supernatural fear, this is the knowledge your character has that the situation can't be fixed and it's time to escape and regroup.
Fear is a known number, that gives a penalty equal to its value to any attempts to press the fight, and a bonus equal to its value to any action taken to get the fuck away from this mess. Whether a panicked retreat or a controlled evac, this lets your wizard scrabble over the fence while your rogue picks up the cleric and the fighter drops obstacles between you and the wolfman that turned out not to be weak to silver.
Abilities or skills that grant fear immunity allow players to ignore the penalty, but they don't get the bonus either. They can choose to revoke their immunity at any time, but can't then turn it back on until the conflict has been resolved. This means Paladins are great at spending a few rounds as decoy before running, without totally ruining the whole purpose of the system.
DMs should trigger Fear when a plan fails, especially if a weapon the PCs are relying on turns out to be a dud. Other good points are hearing/seeing sudden reinforcements, or after an ambush deals significant damage to a PC / important NPC. Many PCs are allergic to running because most D&D editions (along with a lot of other combat systems), make running really hard. So Fear doesn't just give PCs an incentive to run, it gives them the tools to make them feel like they'll succeed.
Of course if the PCs do something really cool and pull something awesome out of their ass to reverse the situation, feel free to drop the fear. This is a tool to help, not a railroad track.
Fear can also be used for important NPCs who need to die dramatically elsewhere. It's strongly suggested to use this sparingly. But using matching rules for PCs and NPCs will make it seem less like you're fudging the results.
Whether horrid landscapes of alien dimension, or a pile of rotting corpses writhing with vermin, most horror games present the main characters with mental challenges outside of just battle. This is horror. The things we don't want to stare at, lest they stare back.
Horror is a known number that gives a character a penalty to any action to interact with the horrific scene/area/item until they perform some act to counteract the penalty. This can be as simple as taking a really deep breath before pulling a key out of a gore stained hole, or as complex as an expensive day long ritual to ward your party from the terror of the other realms. Some actions can reduce the penalty instead of completely removing it, while others might fail (leading to a bit of trauma.)
Specifically this mechanic is designed to let things be horrific without PCs looting it like it's just a red themed dungeon room, while at the same time not drowning the party in penalties. (Though unavoidable penalties are a great way to say 'get the fuck out of here fast.') Treating their innate revulsion as a challenge to be overcome prevents more hardcore players from being annoyed by futility, while letting RPers milk the moment for what it's worth but not going overboard.
(Some people are reasonably asking 'why not use a different system for this?' The answer is because most of these either have the same issues, or have heroes that are a lot more 'frail' than 'heroic.' Systems that allow combat competence and that allow for this style of play are rare to nonexistent.)
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