Following the accepted answer by ChrLipp using Android Studio 1.2.2 in Ubuntu 14.04:
- Install "ARM EABI v7a System Image" package from Android SDK manager.
- Delete the non functional Virtual Device.
- Add a new device with Application Binary Interface(ABI) as armeabi-v7a.
- Boot into the new device.
This worked for me. Try rebooting your system if it is not working for you.