What they did was discontinue support for their old desktop client. Third party clients still use XMPP to connect with Hangouts. More on the subject could be read here: http://xmpp.org/2015/03/no-its-not-the-end-of-xmpp-for-googl...
"We announced a new communications product, Hangouts, in May 2013. Hangouts will replace Google Talk and does not support XMPP."
You can still connect to Google Talk (not Hangouts) with a third-party client, but Google has not kept up with developments in the standard (particularly the requirement for server-to-server encryption) and is no longer interoperable with most other providers.