Just because creator Keita Takahashi has moved onto other projects doesn't necessarily mean Namco won't continue to produce games in the series. Takahashi revealed in an interview with
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that although he may no longer be involved with the beloved series that his parent company "can keep making them on their own."
Though Katamari was innovative and different, not much has been done to expand the gameplay. That fact, combined with Takahashi's apparent need to continually involve himself in new and different things (in fact, he'd rather be designing playgrounds than video games), is likely what led him to distance himself from any future iterations.
Namco hasn't let any info loose on what they have in store for the hit franchise, but new games or not, it wouldn't be surprising to see the now iconic characters pop up as cameos in other titles (Ridge Racer, for instance, which is notorious for borrowing names and images from other Namco properties).
Takahashi's new project is in development for a next generation systems. He doesn't think it will sell very much because his team is really trying to push the boundaries, but then again, nobody expected Katamari to become very popular, either. Only one thing is known at the moment – it won't be available for Nintendo's Wii.