Narrative-driven games is also quite a vague term when it comes to someone like Levine. His games through the years haven't exactly been accused of being shallow when it comes to the narrative but if he's referring to diminishing the action elements of his games I can't say I disagree with his choice. As much as I enjoyed Bioshock Infinite I think you'd be hard pressed to find someone whose favorite part of the game was the combat system. I think the Bioshock universe could benefit greatly from a story heavy RPG rather than a first person shooter although the shooting aspect was surely adequate.
However, if "narrative driven games" means something like what Telltale have been doing with the Walking Dead, Back to the Future and more I'm not sure how well that would go with the Bioshock universe, it could work out great but I'd still prefer a more hands-on experience. Perhaps this marks the end of the Bioshock franchise or Levine's part in it but I truly hope not.
Whatever he chooses to do I look forward to seeing it, playing it and, hopefully, loving it.