This has potential. The sprite itself is mostly fine, the only confusing part is where his arms and hands are supposed to be. You can fix this by coloring them as you did with skin.
The background looks good, but the background is too similar to the foreground in terms of color. Pumping up the saturation in the foreground and decreasing it in the background might help differentiate the two. After all, you don't want people confusing what's part of the level and what's just scenery. The crate's shading is too flat, and the Life bar on the left is way too big. Also, the signs are way too white. Even if the wallpaper on the sign is supposed to be white, it's still exposed to the elements. Maybe putting some snow over it would help make it seem like it belongs better.
Lotta little things can help make this good. Like I said, this has potential.