AC on hand helds moves a shitload.  Just look at the recent figures and go back to last year around Nov when it launched in Japan.  AC moves hand helds.  Biggest system seller than almost any IP on hand helds.

I'd agree that in terms of sales, Animal Crossing has become a better performer than Zelda and will likely continue to be, especially on handhelds. I think it's worth mentioning geographic locations. If we're talking Japan, Zelda is VERY niche there at this point, whereas Animal Crossing is HUGE. In the US however, Zelda is one of the very few Nintendo franchises that is often regarded with respect from the "hardcore" US gamer, and Zelda pretty much always sells best here. Animal Crossing has been improving in the US, especially on handhelds again, but on consoles not as much. Europe is more in the middle. You could also take into account install bases of the consoles themselves and the "make-up" of that install base. Wii and DS both sold HUGE numbers and did so by appealing to a much more casual market of gamer, which obviously helps out AC sales, while making Zelda less important sales-wise.

One other interesting note is that Animal Crossing is right around a decade or so old now and, with New Leaf, seems to potentially be reaching a new peak in terms of its sales. Zelda is 26+ years old...back when Zelda was about a decade or so old, it too reached a new peak for the franchise when Ocarina of Time was released. Since then, a single SKU of a Zelda title has never surpassed Ocarina of Time's numbers (Twilight Princess has with both SKU's combined, plus the fact that it's been almost constantly available 6+ years after release and at a very attractive price for the last couple years), and you have to wonder if maybe Animal Crossing could end up in the same boat?

It's impossible to say right now, but I WILL say that (though I LOVE Skyward Sword-controls and all, AND I'm really looking forward to Wind Waker HD), Nintendo is NOT taking the right approach when it comes to maximizing Zelda's sales potential and popularity. They seem fixated on trying to turn it into a mass-appeal, everyone can enjoy, "Mario-type" franchise, but that's only hurting it. Zelda is a hardcore franchise and sells best when they appeal to THAT type of gamer. While everyone has their favorites, it's not difficult to understand why Ocarina of Time and Twilight Princess are the best-selling 3D Zelda games. In terms of gameplay, they're both VERY traditional, and graphically (while still managing to be beautiful), they take a decidedly more realistic approach than the others. They look and play more like typical "western" games, while still retaining the charm and polish that make Zelda special. Again, I enjoyed Skyward Sword immensely, including the controls, and can absolutely appreciate the beauty of Wind Waker and other titles, but forcing people to use motion or touchscreen controls and making games that many "hardcore" western gamers consider to look "kiddy" isn't helping Zelda sell what it's capable of selling.

Yes.

It's all about doing chores with anthropomorphic characters. Why pay off my debt in the real world when I can do it in a game? Zelda never stood a chance.

If we are just going by sales, then yes AC is now bigger than Zelda.

But what about cultural impact? Zelda has had huge impacts and has been an inspiration for many other projects.
Zelda is the bigger franchise. Do you think AC could have a successful symphony tour last a few years?

Zelda is bigger in pop culture, AC is becoming the sales machine

Well we'll have to wait for this generations sales numbers, but if we're talking about Total Sales/ accounting for Non-Hardcore hype.... I don't think either Zelda or Animal Crossing is the third triforce piece.

What do you actually do in animal crossing? I've never played it

Id go to say their in the same tier list neck and neck,LOZ has strong sales but hasnt had great timing as of late of their releases. I mean look at Skyward Sword,released during a flat falling of the Wii console and then LOZ OoT a remake released when the 3DS was and see how the 3DS struggled the first few months?

The next LOZ thats coming this year for the 3DS will match AC NL pound for pound IMO!

On handhelds Animal Crossing is bigger, but on consoles Zelda is bigger. Though we'll see what happens when Wii U Zelda, Wii U Animal Crossing, and Link Between Worlds come out.

I think they are both big and both have their public. And Animal Crossing does help sell system.
With new leaf the sales of 3DS increased by 3. So they are equally big,