Fast forward three years and I too had this problem with Beetle-Saturn and the above suggestions all didn't work. However, launching directly from RetroArch did work so that meant the problem lies somewhere in LaunchBox.
And in my case, it's the new automatic rom importer. I noticed that every game that didn't launch listed all the constitute parts of the game as different versions: the data-containing ISO or BIN file; the other tracks (usually WAVs or other BINs); the CUE file and if there were multiple 'discs' so therefore multiple CUES linking to multiple other files, the M3U file. Could LaunchBox be attempting to pass the first of these files (usually the main BIN or ISO) to RetroArch and then failing?
Yes. Yes it does.
Now fortunately, the fix is to edit the metadata (select the game and CTRL-E), go to Launching and set ROM File to the CUE file of your single-disc game or the M3U file of your multi-disc game. Unfortunately, you have to do this for all your affected games.
Actually, no you don't.
Much easier is to delete the affected game from the platform list in which it appears. With this view still open, now drag either the CUE or M3U file of the game into it. The Import wizard should appear, the correct platform should be selected and go through the familiar steps to import the game. Once done, your game is back in the list, there are no extraneous 'versions' listed and the game should launch successfully. If it still doesn't, make sure your CUE file(s) list the correct filenames of the constituent parts and your M3U file lists the correct filenames of the CUE files, if such a file is required.
