I have searched in the web and found very few material on this question. I've heard of Unity 3D and know that there are other tools. But I would like to know if it is possible to develop games in Android Studio? I'm learning Android development and Java, therefore don't want to jump into other language and platforms. However, if it is not efficient way then which one you would advice? Where to start?
Yes it's possible. You can make your own game by using game engine that freely available for Android.
You can use LibGDX. For the tutorial with Android Studio, you can read here.
Visit Sample 2D game with LibGDX