Have you tried installing and running as Administrator?
(Right-click the icon and choose "Run As Administrator" from the context menu.)
You could also try installing to some location other than C:\Program Files or C:\Program Files (x86). This is what games from GOG do -- they install in a "C:\GOG Games" folder instead of where the original disc version of the games installed.
Is VMWare a good way to go? I haven't run any virtual environments on my 8.1 machine.
It is worth a try, since Kemal was able to get Sacred Rings playing inside VMware.
VMware is the best for running Windows 95/98 virtual machines on Windows 8/8.1.
is expensive --> ***link***
is for Macs, and is generally less expensive than Workstation --> ***link***
So most gamers who use VMware use VMware Player.
I used Fusion when I was using a Mac.
VirtualBox is free, but does not run Windows 95 or 98 well at all.
It should work OK with Windows XP.
VirtualPC won't install and run without crashing on Windows 8/8.1 without a lot of fuss. Getting it to install and getting it to work without crashing are two different things. It worked much better with Windows 7. To get it working without crashes, I had to locate and download an antique version of Windows Phone, as well as an obscure upgrade that was not too new.
So of these three, VMware Player is the best choice for installing Windows 95/98 in a virtual machine that is running on Windows 8/8.1.
As Draclvr pointed out, all of these virtual environment programs need a Windows installation disc. And if you install XP or later on a virtual machine, you'll have to activate it after installing. If you do this, I'd advise you to back up your virtual machine immediately after Windows activation, before installing any games on it, so you can restore it to a fresh install condition without using up another activation.