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Are these two different games, or compatible? Or did Hobbit replace LoTR?

The Hobbit is simply a new 'edition' of LotR. All the rules are fully compatible, as are the models and profiles. It's basically all one game.

As far as I've been able to determine The Hobbit as an edition has added more detailed terrain rules, a few extra keywords, and some special attacks to LotR. Statlines and army lists are almost entirely backwards-compatible, but I'm not entirely sure why the Five Armies Good army lists don't have banners or horns.

 AnomanderRake wrote:
As far as I've been able to determine The Hobbit as an edition has added more detailed terrain rules, a few extra keywords, and some special attacks to LotR. Statlines and army lists are almost entirely backwards-compatible, but I'm not entirely sure why the Five Armies Good army lists don't have banners or horns.

From my understanding, the Five Armies material and minis was rushed into production. The filmmakers didn't give much lead time for GW to develop items for the installment. That is part of the reason why there were no additional dwarves to represent the reinforcements that came to assist Thorin.

As it has been stated, both are compatible with eachother and the Hobbit Strategy Battle Game Ruleset is considered the "Latest Official Rules" for the purposes of tournaments.

However, there is a new rulebook coming out next summer that is "Middle Earth Strategy Battle Game", so look out for that one.

They're now the same game including both the Hobbit and pre Hobbit armies. The only place these really clash is in there are now two very differently styled versions of the mirkwood army.

Cyrixiinus wrote:
They're now the same game including both the Hobbit and pre Hobbit armies. The only place these really clash is in there are now two very differently styled versions of the mirkwood army.

They don't look that different to me, but the Desolation of Smaug book is apparently gone so I don't know what Mirkwood Rangers or Palace Guard do.

The complied and updated rules for the 3 hobbit movie forces is coming in about 2 months or less (they need both fleshing out and balancing, as some things just didn't make sense, and some things too good/ bad comparitively).

But for all intents and purposes they are the same game, just a new name for that rules iteration. When the fully updated rules/profiles come out next year it's going to be referred to as Middle Earth Strategy Battle Game.