Globally, it's ok, i like the cute pose, the little paws hugging. Specifically, it has a few places where it can be improved greatly.
The head makes it look like a rhino (because of head and ears shape, and that horn looking thing), but the legs and paws are more cat like. Maybe you could find some reference to tweak out some anatomy details, like the anterior furthest paw, or the volume of the torso (the back and belly look a bit weird, and the head) - even if it's a blue alien cat or whatever, solid reality based anatomy makes it sooo much better.
The shading on the body looks pillow-shaded, not so much on the tail. You seem to have a light source from above, and the shading on the posterior closest paw follows this, but the rest of the piece is mostly "add lighter color to the middle of area, gradient uniformly until outline". Try to follow the lightsource more closely.
Dithering needs to be more uniform throughout, you've dithered the darker colors into the lighter, but the lighter ones should also dither into the darker areas.
The bright selout on the tail has a darker area near the middle, i don't think it should be there.
I may do an edit later today.
Good luck with the piece and the game, and make sure you tell us when it's playable
