It might appear to be just a guy in a goofy green suit standing there, but that's only half right — there's actually a robot in there.
U-Tsu-Shi-O-Mi is being called a "virtual humanoid." Its suit functions as a green screen and allows for an animated avatar to be mapped over its limbs and mimic the robot's movements. While wearing a head-mounted display, the user can interact with the virtual U-Tsu-Shi-O-Mi in a fully tactile way thanks to the bot's skeleton, which gathers information through force feedback. So instead of just floating through space, the user will actually be able to feel and react to their virtual counterpart.
At the moment, the technology which brings U-Tsu-Shi-O-Mi to life is still a little too cumbersome and expensive for general home use, but, with the arcade alive and well in Japan, perhaps it'll end up there. Continue reading for a video demonstration.