Download Google apps (GoogleLoginService.apk , GoogleServicesFramework.apk , Phonesky.apk) from http://wiki.rootzwiki.com/Google_Apps#Universal_Packages_2

Start your emulator:

emulator -avd VM_NAME_HERE -partition-size 500 -no-audio -no-boot-anim

Then use the following commands:

Remount in rw mode

adb shell mount -o remount,rw -t yaffs2 /dev/block/mtdblock0 /system

Allow writing to app directory on system partition

adb shell chmod 777 /system/app

Install following apk

adb push GoogleLoginService.apk /system/app/.
adb push GoogleServicesFramework.apk /system/app/.
adb push Phonesky.apk /system/app/. # Vending.apk in older versions
adb shell rm /system/app/SdkSetup*

Refer: to this SO Post

All this is not necessary on the latest MM API images.

All that was needed for me was to:

adb remount
adb push Phonesky.apk /system/priv-app/.
adb stop && adb restart

Starting with Android Studio 3.0 Canary 1, you have now some options of devices that come with the Play Store app built-in (like Nexus 5X and Nexus 5 on image below).

Also, you should use a system-image which targets "Google Play" (instead of Google APIs), as said images come with "Google Play" pre-installed, and you can just like a real device open "Google play" and update it.

Update 2022; but even with above, you cannot use the Emulator to test Google Play Billing:

• You must install your application on a real device to test Google Play Billing,
• Or, ask Google for "closed testing" permission.

see How to test In-app Billing on an emulator?

On new version of sdk, you could browse:

C:\Users\{$User}\AppData\Local\Android\sdk\tools

Create avd from command line:

android create avd --name bphone --package "system-images;android-23;google_apis;x86_64"

There will be a question asking you to custom profile, say yes, then an asking to install CH Play or not, just type yes.

Then, open AVD Manager inside Android Studio to reconfig. Notes: Remember to change CPU/ABI to x86

After a long while of testing, everything seems to be outdated. I can't find necessary APK's like GoogleLoginService.apk, etc.

I got it to work by installing two virtual devices.

1. My Device (a Samsung Galaxy Tab A with custom skin and sizes)
2. A device, which had the "Play Store Available" icon in your AVD-Manager on the site where you can create a new profile.

I installed the first device and the second device with the same Android version, and used one profile from Samsung (because my tablet is a Samsung).

After that step, I compared the config.ini file located in:

C:\Users\USER\.android\avd\DEVICE_ID

On Ubuntu/Linux it'll be in

~/.android/avd/DEVICE_ID

Change the following variables to:

PlayStore.enabled = true
image.sysdir.1=system-images\android-27\google_apis_playstore\x86\
tag.display=Google Play
tag.id=google_apis_playstore

Here's an example diff of what fields will be changed:

After that you'll probably have to re-download the system image for the device, which you can do from Tools > AVD Manager.

Here's an example screenshot of what that'd look like:

Once done, restart the device, and Play store will be installed and ready to use.

1. Choose device that support play market

2. Choose your android version ( I I recommend the "R" version )

3. Choose x86 image ( Target- GOOGLE PLAY, NOT Google APIs! )