The default video player in Android Phones doesn't supports .avi and other Movie file.
To play these on your phone, you need to download new video player.
Here is a good application that supports movie file.
MX Player by
J2 Interactivehttps://play.google.com/store/apps/details?id=com.mxtech.videoplayer.ad&feature=search_resultI installed this to my Android 2.3.6 Gingerbread Version, and based on my experienced with this app, it successfully plays .avi files particulary movie files, and therefore will expect the same way to higher version of Android.

You may find that this app won't work as you open a file. If that happened, tap and hold the title of the movie you want to play until this popup window appears. Then tap
Play using...then tap
S/W decoderTake Note: You need to open your movie file on the app itself, if you open it directly to its directory folder, absolutely the system will say...
Another good feature of this application is that it can play subtitle.
Here is the list of the supported subtitle format.
.txt, .srt, .ssa, .ass, .smi, .sami, .sub, .mpl, .psb- DVD, DVB, SSA/ASS Subtitle tracks.
- SubStation Alpha(.ssa/.ass) with full styling.
- SAMI(.smi/.sami) with ruby tag support.
- SubRip(.srt)
- MicroDVD(.sub/.txt)
- SubViewer2.0(.sub)
- MPL2(.mpl/.txt)
- PowerDivX(.psb/.txt)
- TMPlayer(.txt)