Inevitably, preview releases break some software, and Windows 8.1 is no exception. Developers building Windows Phone 8 apps may experience problems using the emulator on a Windows 8.1 preview system, but there's a workaround.
The fix in this instance is to install Visual Studio 2012 Update 3, which fixes the compatibility issue, and a number of other problems associated with Windows 8.1. Hit the Windows Phone Developer blog post for full details on the fix.
Running the Windows Phone Emulator on Windows 8.1 Preview [Windows Phone Developer Blog]