I think it’s ugly. Would you play a game with such a thumbnail?
I’ve spent the last hour in Blender trying to make a better one to no avail…
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I’m not a GFX artist, but I recommend you something, if you are going to export a character to use them in blender, export them with R6 Rig.
Yeah compared to other thumbnails you see on the front page, it is ugly. I’ll critique it and see what can be improved on:
The black bars at the top and bottom are pointless and just make the thumbnail worse. You don’t see black bars in thumbnails, and when you do, it’s plain black (no texture, no lighting) and it’s for a very specific purpose (e.g. part of the style of the media). Of course that doesn’t mean you can’t innovate, but it doesn’t look you’re innovating here and you’re putting them in ‘just because’. If you’re compensating for issues with the rendered image, then you should be fixing the rendered image.
The lens flare kinda sucks. As a beginner it’s usually a bad idea to focus on stuff like that, instead you’d want to focus on making the image itself look good. If you need a lens flare effect, just do a simple radial gradient for now. Also make sure that, whatever your effects are, they are big enough. Part of the problem with your lens flare in that thumbnail is that it is too small – scale it up. Additionally, the lens flare just doesn’t suit where it is being used. It looks you are trying to make it look like the knife is reflecting something, but whatever it is reflecting is awfully bright and there are no other signs of a bright light source in the image.
The characters are okay. They seem kinda plain and generic-feeling, but that might just be me. The lighting is plain, too.
The background is boring and weird. Is that meant to be a lava waterfall (lavafall? 
) ? You can see the texture repeating, and it’s not evident what exactly that big glowing orange background is. Lava isn’t rectangular, and rock walls aren’t perfectly flat. Additionally, due to how the background is glowing it kind of distracts from the image. I recommend that you either get rid of the background entirely, and focus on making the foreground characters look good with a basic sky/darkness/whatever background. Even if you do keep the lava style, adds some depth of field or decrease the brightness to make the characters pop more.
Overall it’s okay in the core idea but the execution needs work. It’ll come with practice 
If you can’t get a good thumbnail by the time your game releases, feel free to hire someone. It might be hard if you don’t have funds, and you want to make sure your game is fun to play before doing something like that, but it’ll definitely be good. Getting good at stuff like this is a matter of time.
Don’t be afraid to experiment with filters and stuff like that play with the colors, too. I find Curves, Saturation, Contrast and layer blending modes to be pretty useful to mess with colors to make your image more interesting, however it is somewhat advanced and I would say you need to be a bit more experienced with just creating decent, plain images first.
Good luck! 
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Yes. Thank you so much!
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The characters don’t seem fit for a sword fighting game?
I’d imagine armor, shields, etc. Not a fairy and a dude with antlers haha, just my thoughts.
flashes are coming out of nowhere
player one looks like steve from minecraft
change p2’s armor texture thing
the faces don’t seem like they’re in combat
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Improvement can absolutely be done, I can suggest hiring someone for the job.
I’ve heard good things about @KxraDraws!
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FYI guys I ditched this after I read EmeraldSlash’s excellent reply. No need to roast my terrible GFX anymore 