Like many works of horror, Town of Light

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Set in the Ospedale Psichiatrico di Volterra – a psychiatric hospital in the otherwise idyllic location of Tuscany, Italy – it’s an emotionally dark tale. Its developers, also from Italy, are keen to state there are no jump scares or literal monsters hiding in its shadowy corridors, But having played an early build of Town of Light, I still think it’s best to think of it as a horror game, but one that’s more firmly in the tradition of the psychological ghost story. And it’s definitely found the perfect location for this type of narrative.

Volterra was once home to more than 6000 patients, but was closed down in 1978 after an investigation deemed its procedures to be cruel. In truth, this was more of a prison than a place of genuine medicine; it’s patients rarely returned to health or home. The asylum still stands to this day, and being an exceptionally creepy abandoned psychiatric hospital, there is no shortage of photos online taken by fearless urban explorers.

Looking through these pictures it’s clear why Volterra was selected. The best ghost stories can be appreciated as a painful and disturbing conversation with the past, one that’s never been resolved. Sometimes the ghost is real, a genuine supernatural phenomenon; sometimes it turns out to be a form of psychological disturbance. In one sense, the difference is irrelevant – both depict the past exerting an unnatural influence on the present and creating trauma. Volterra is exactly one of these places.

You play as Renee, a former patient who has returned to confront what happened to her there. While you’re soon taken into deeply disturbing territory – which I won’t go into because to do so would be to ruin the revelation itself – the game opens on a warm, sunny day, and everything seems to be right in the world. Even though you’re stood outside the asylum, which is stashed away in a deep forest, there’s nothing overtly gothic or sinister about the set-up. But as you walk up the path that leads to Volterra, a palpable sense of melancholia begins to seep into the game. It’s clear you’re returning to the worst place you’ve ever been.

The game places you into an interesting position. Like Gone Home, to which you could make several easy comparisons, you’re playing a character with a very specific backstory of which you’re entirely oblivious. The game seemingly plays with that ignorance. What happened to Renee? Curiosity draws you into the asylum.

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In the hospital courtyard, the walls are scarred by the carvings of the patients who were trapped within. Its musty rooms are littered with broken mirrors, empty wheelchairs, and – in one room – a forgotten doll. The atmosphere is intimidating but not overly oppressive; it almost feels like an early Guillermo del Toro movie. Like the orphanage in The Devil’s Backbone, this a place that rests upon terrible memories and dark secrets. Gameplay, like Gone Home or Dear Esther, rests upon a slow mixture of exploration and puzzle solving, with the latter being a touch opaque at times.

Ultimately Town of Light’s real appeal lies within its treatment of memory. I only spent a small amount of time exploring Volterra, but it’s evident the developers are prepared to tackle seriously delicate and sensitive issues. While it’s nailed the wistful but sour atmosphere of this place, it’s real success will hinge on how well it depicts these very sensitive story elements. Horror is a provocative genre, regularly using potent imagery and situations to stir strong emotional, physical, and intellectual responses. Town of Light touches some of the most provocative – childhood trauma, abuse, mental illness – and for it to succeed it needs to explore them responsibly, not just use them to shock.

Daniel is IGN's Games Editor over in London. He writes about movies, too. You can be part of the world's most embarrassing cult by following him on IGN and Twitter