Even when Merlin extends his hands, they are fairly large shapes. So watch how detailed you make the anatomy. The colors used in the character's images. The more you use the same color, the better the character editor can compress the image. All the Microsoft characters are quite expensive, because they are nicely shaded to appear three-dimensional.
Adjacency is important as well.
The number of images used in the character's animation file. Reusing images saves file size. All the Microsoft characters use the same bitmap file for their starting position. This file is stored only once when the character is built. The number of frames in an animation.