So, it’s an interesting idea.
There are a few issues, though:
1) The pickup point is really awkward. I often placed the item in the wrong spot, and missed even more times while standing right next to the object. It was pretty frustrating.
2) As time runs out, the dragon gets constantly agitated; it really sucks to die simply because there are no items left to bring him. And from what I gather, this happens no matter what.
3) It’s not entirely clear where to put the wrong items or where the "correct" zone is. I tried setting the wrong items aside—away from the dragon—about four times, but he’d smack me for it because it counted as an interaction. I only found out about the hole later; before that, I thought it was just a weird-looking wall.
On the plus side:
The game is quite addictive, with pleasant visuals and music/sound effects that fit the atmosphere perfectly.
Good job.