Hard to read indeed. I think one of the problems is that too much black outlines in the background doesn't help in fading it out (indicating distance). Also a bigest color or value contrast between the background, ground and the figures would help a lot.
On the other hand, the shapes are very good, it looks that you have pottential, so keep working.
Pixel placement and control are evident and i can see where you were headed but the overall look is very hard to read...its just a pixel pudding. Defining areas, using contrast, and helping the viewer always makes for better pixelart.
I like the concept and designs, but the colors - they make my eyes cry out for pity. That combined with the predominance of black outlines in absolutely everything makes this piece very, very difficult to read - if this were a game screen, I'd have no idea what was going on. This has potential, but to bring it out completely, it needs quite a bit of polish.