When creating a new Android 4.4 Virtual Device using the AVD Manager, I cannot get the internal storage to be anything larger than 200MB.
512MB is the internal stora
delete /data/data/com.google.android.gms/files will release 200M+
For me it was an issue when I accidentally chose the AOSP 4.4.2 emulator in Android Studio. The Google Inc. x86 emulator (below) doesn't seem to have this bug.
Even above suggestion can cause to android emulator hang on boot logo. The reason is that resize2fs do the changes thats are right in general but considered as broken fs by android and prevent it to mount it in rw mode, that hangs up the boot process.
Examening boot logs shows something like that:
EXT4-fs error (device mtdblock1): ext4_mb_generate_buddy:741: group 2, 32366 clusters in bitmap, 32370 in gd
Event e2fsck does not fix it for android and to workaround it i use tune2fs to change the way how android should continue to mount broken fs.
tune2fs -e continue userdata-qemu.img
To build up on @Frohnzie's answer, resize2fs and e2fsck are now included in the SDK Tools (you may need to update your SDK tools to see them) so you don't need to install them separately. They are located under yourAndroidSDKFolder/tools/bin (Windows, Linux) or yourAndroidSDKFolder/tools/bin64 (Mac, Linux).