While Pokémon in and of themselves aren't too horrifying-looking, some of the things they could theoretically do to a person could definitely work in a horror setting.
>>32101121
Only if they go the whole realistic-looking mon approach and take all the horrific liberties they want. As they are now, there's nothing scary about them.
If picked up by a decent company and done correctly, yeah - something in the vein of Acerola's trial but on a larger scale could be fun. It would probably never happen officially though, what with the younger demographic.
Imagine scuba diving in dark waters and then you catch a glimpse of a Gyarados fifty metres away circling you
Pokemon could work in a lot of genres with the right developers.
But with Game Freak? Nope.