This article http://cobworks.ca/2010/04/19/why-android-market-has-no-games/ suggests that it does not, but I was hoping something might have changed since April.
Google released a new version with native x86 processor support, which sped things up a bit. It also supports OpenGL ES 2.0,faster-emulator-with-better-hardware :
As a bonus, since we’re now supporting OpenGL ES 2.0, your OpenGL
games can now run inside the emulator.
Note: When creating a virtual machine, make sure to select the “GPU emulation” option from the hardware menu if you want to take advantage of the new features.
OpenGL ES 2.0 is not supported on Android Emulator (provided in SDK 2.3). Google is working on this feature but it is not yet available.
Update: it is available on OS X and windows with 4.0.3 image.
This worked for me ;
My Emulator runs on 4.2.2 Platform
1. Download and install the intel X86 Emulator Accelerator (Haxim) from the extras of the SDK manager
(You might be required to to enable virtualisation on your Bios setting if it is not.) .
2. Select an AVD of low dimesnsion say 3.2″ .
3 . Select an Android API instead of google API target\ .
(Google API defaults to Ameabi-v7a CPU but you need an intel Atom x86 .
4 Select reasonable memory and internal storage .
5 Check the “Use host GPU” from your AVD .
6 while running your android application add “-gpu on” in the additional command line option command .
“HAX is working and emulator runs in fast virt mode”…This shows on your console at runtime
(My Emulator became faster than my PC)
Yes, support was completed in gingerbread. See version notes.