This obviously has a lot of potential and could be incredibly great, but it has a lot wrong with it that prevents it from getting there.
Movement is handled by the WASD keys instead of arrows (unless there's some need to use the mouse later on).
There's a whole lot of lag.
The punches take way too long to wind up and don't always seem to execute upon pressing the space bar.
Those boxes take way too many hits to blow up.
The controls are slow and unresponsive, especially the punches. Still, this has a lot of work in it, so keep it up.