I am attempting to run an AVD I have created for API 16 on a Galaxy Nexus:
emulator @Galaxy_Nexus_Jelly_Bean_API_16
which gives the error>
[Partial answer - to a related issue on the IDE]
I have faced this problem also. My Android Studio couldn't even start the emulator, coming up with an error like "Emulator: Process finished with exit code 1". The fix there was to install/update the relevant system images under SDK Manager -> SDK Platforms (tab) -> Click "Show Package Details" and then "Apply".
However, this doesn't seem to make the CLI command emulator -avd run, instead I see the PANIC error, but apparently it's related to the migration of the emulator from the SDK path /tools to /emulator