It is interesting to compare the popularity of the different football codes between the Australian states – historically SA, VIC and WA are AFL states, NSW and QLD rugby states.
AFL appears to be recently making headway into the northern states, and starting with the kids is the way to go. One thing I believe that makes Aussie Rules a popular sport with kids, and gives it an advantage, is the ability to have a social kick to kick. In comparison, throwing a rugby ball to each other does not have the same excitement.
The highly physical nature of the rugby codes also does not lead themselves to schoolyard play. With the issues of liability and the concern about injuries, we may see a gradual change to AFL. Soccer may beat them all, but that is another story.