There is a possibility that SDK fails to update. This is a known issue since revision 8:

Normally, you will be informed by the Android SDK Manager Log:

Downloading Android SDK Tools, revision 16
Installing Android SDK Tools, revision 16
[post_tools_install.bat] Updating SDK Manager.exe
[post_tools_install.bat]         0 file(s) copied.
[post_tools_install.bat] Error: The process cannot access the file because it is being used by another process.
[post_tools_install.bat] Updating AVD Manager.exe
[post_tools_install.bat]         1 file(s) copied.
Installed Android SDK Tools, revision 16

 The solution is simple:

  1. Ensure that your Explorer is closed and not/or not listing your SDK tools folder. It seems that explorer locks tools.
  2. Open a CMD window and go to your SDK tools folder.
  3. Run android.bat