This is a great question......
In our location, we are finding the recent trends show that people are placing less importance on a formal livng room and are seeking to make their home's space more useful to their family's needs. People are finally coming to grips with the fact that a formal living area ends up being a museum for furnishings that are seldom used.
With this said, your proposed plans are in step with a changing trend that so many home owners are moving toward. Additionally, today's builders are also moving away from building homes with a formal living area. It just isn't a good use of square footage and results in money poorly spent.
It is my opinion that it's very unlikely that you will decrease your home's value and probably should increase its market value and buyer appeal.
Your adjustment is one that is keeping pace with the current trend....don't second guess yourself.
Good luck with your project. I'm sure the change is one that will be a welcomed improvement.