Google is “demoting” Hangouts from being part of the core Google Mobile Services apps to become a “GMS Optional for telephony products.” This means manufacturers releasing phones by 2017 (the changes will take effect on December 1, 2016) won’t have to include Hangouts in the core apps included in their phones. The app is being replaced by video calling app Duo. This won’t change the availability of the app. You can still download Hangouts from Google Play Store. And of course some manufacturers might opt to keep the app pre-installed.
It’s curious, though, that Google is opting to replace Hangouts with Duo instead of Allo. But it also shows how Google wants to push its video calling platform.
Source: Android Police