L'arco narrativo cambia con l'ambientazione.

Because arco is a singular noun that begins with a vowel. In Italian, the singular definite article before a vowel is l'.

So:

• il libro → l'arco
• la casa → l'ambientazione

In this sentence, l'arco means the arc.

It is a noun + adjective combination:

• arco = arc
• narrativo = narrative

So arco narrativo literally means narrative arc.

Italian often places adjectives after the noun, so where English says narrative arc, Italian naturally says arco narrativo.

Because the adjective must agree with the noun it describes.

Here, arco is:

• masculine
• singular

So the adjective must also be:

• masculine
• singular

That gives narrativo.

Compare:

• arco narrativo = masculine singular
• storia narrativa would be different, because storia is feminine singular

Cambia is the third-person singular present indicative of cambiare.

So it means:

• changes
• is changing, depending on context

Here the subject is l'arco narrativo, which is singular, so cambia is singular too.

Examples:

• La situazione cambia. = The situation changes.
• Il finale cambia. = The ending changes.

Italian usually does not use subject pronouns unless they are needed for emphasis or contrast.

The verb ending already shows the person and number, and the noun l'arco narrativo is stated explicitly, so there is no need to add a pronoun.

Italian prefers:

• L'arco narrativo cambia...

not:

• L'arco narrativo esso cambia... (unnatural)

Con literally means with, but in this sentence it has the sense of along with, depending on, or as a function of.

So cambia con l'ambientazione means that the narrative arc changes with the setting — in other words, when the setting changes, the narrative arc changes too.

It is not necessarily saying physical accompaniment; it is expressing a relationship.

Because ambientazione is a singular noun beginning with a vowel, so the definite article becomes l'.

Also, ambientazione is feminine, so its full article before a consonant would be la. Before a vowel, la becomes l':

• la scena
• l'ambientazione

So l'ambientazione means the setting.

Ambientazione usually means the setting of a story, film, game, or scene — the world, place, time, or environment in which events happen.

It is a very common word in literary, cinematic, and narrative discussion.

For example:

• L'ambientazione medievale = the medieval setting
• L'ambientazione urbana = the urban setting

So in this sentence, it refers to the setting that influences the narrative arc.

This is the normal and straightforward Italian order:

• subject: L'arco narrativo
• verb: cambia
• prepositional phrase: con l'ambientazione

Italian word order is often similar to English in simple statements. So this structure is very natural.

You could sometimes rearrange parts for emphasis, such as:

• Con l'ambientazione cambia l'arco narrativo

but that would sound more marked or literary. The original sentence is the neutral version.

It can be understood either way depending on context, but very often Italian uses the definite article for general statements too.

So l'arco narrativo and l'ambientazione can mean:

• a specific narrative arc and a specific setting already being discussed, or
• the narrative arc and the setting in a general, conceptual sense

Italian uses the definite article more broadly than English does, so this is very normal.

Yes. Con is natural and concise, but other phrasings are possible depending on nuance.

For example:

• L'arco narrativo cambia a seconda dell'ambientazione.
  = The narrative arc changes depending on the setting.

• L'arco narrativo varia in base all'ambientazione.
  = The narrative arc varies according to the setting.

These alternatives may sound slightly more explicit or formal. The original sentence with con is shorter and very natural.