This has just happened to me. For some reason, all my machines had 
machine='pc-i440fx-wily'.
After an update in yakkety, they stopped working.

$ qemu-system-x86_64 -enable-kvm -machine help | grep wily

So I updated the machine xml to a supported machine as Charles
suggested, and they work again.

Here's the note for my future self about how to do the update:

$ virsh dumpxml $machine-name > /tmp/machine.xml
Edit the xml.
$ virsh define /tmp/machine.xml

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https://bugs.launchpad.net/bugs/1305402

Title:
  libvirt fails to start VirtualMachines

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