For most of the last 100 million years, South America was an island continent, like Australia, with its own peculiar mix of species, largely isolated from other continents (although monkeys, and guinea pig relations, rafted across.) By contrast, North America was intermittently connected with Eurasia and exchanged species off and on. South America supported a rich array of marsupials, including a marsupial version of a saber-toothed tiger. It also had predatory flightless “terror birds” that seemed bent on reoccupying the two-legged predatory dinosaur niche.
There was also a profusion of notoungulates (probably distantly related to hoofed animals in North America and Eurasia), and liptoterns. (Below is a reconstruction of a late surviving liptotern, Macrauchenia, looking like a Dr. Seuss invention.)
South America was close enough to North America for the two continents to start exchanging species by 14 million years ago, but the really massive exchange began with the establishment of the Isthmus of Panama, and climate changes, about 3 million years ago. 38 genera of land mammals walked north from South America. 47 genera walked south from North America. So the initial exchange was unbalanced; the subsequent evolution was even more so. Only a handful of South American invaders – notably armadillos and (for a while) ground sloths – succeeded in establishing themselves in North America, while North American invaders generated a profusion of new species. Many of the really distinctive South American forms would go extinct over the next millions of years.
Paleontologists dispute the causes of the turnover, but it looks an awful lot like North American species had a competitive edge. This is one instance of a phenomenon we’ve seen already in animal evolution, and will see again in human history, of large land areas generating more competitive forms.