If you get these kinds of errors:
Error occurred during initialization of VM
Could not reserve enough space for object heap
Error: Could not create the Java Virtual Machine.
Error: A fatal exception has occurred. Program will exit.
Then the solution for me was this:
Variable name: _JAVA_OPTIONS
Variable value: -Xmx512M
The above is thx to this post: http://www.savinoordine.com/android-studio-gradle-windows-7/. Works for Windows 8.1 + Android Studio 1.0.2