In an email sent to Google Mobile Services partners on October 5th, Google outlined a significant change to the core GMS package (AKA gapps) for telephony-enabled Android devices (basically, smartphones). As of December 1st, Google will no longer requires Hangouts to be bundled with new hardware. An excerpt of that email follows.
Today, we are announcing that Google Duo will replace Hangouts within the suite of core GMS apps, and Hangouts will become GMS Optional for telephony products. This change will take effect on December 1, 2016.
This does not mean Hangouts, or Hangouts for Android, is dead. It does mean that manufacturers may opt to stop including it on smartphones released in 2017, so you'd have to download it from the Play Store after initial setup. Which, really, that's not a big deal. There's also no guarantee that manufacturers will stop bundling the Hangouts app on their devices, but I would strongly assume that's likely - OEMs and mobile operators want to push their own messaging solutions, or those of partners paying for placement on their devices, and Hangouts was competition. An opportunity to remove that competition is obviously going to have appeal.
Source:AndroidPolice
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