He said that the current business model means publishers are having to spend more money on developing music titles to receive diminishing returns.
"They have to do more and more, and they have to pay more and more, and the audience is getting smaller, because they are choosing a narrower audience. It's a collapsing pyramid," he told DS.
Castle also noted that browser application InstantJam, which allows users to play and download song MP3 files, will be attractive to both players and music companies.
"Our game starts off with a pretty big base of thousands of supported charts, so it's the opposite, and as new songs come out we're going to be adding to it, and motivate people to go buy songs who have never bought songs," he said.
"It gives to the music industry what they've been trying to do, which is, as music expands, expand the business, expand the opportunity for them to get them a lot more money."
Castle added that players are still interested in music-rhythm games despite fewer releases and sales from the genre in recent years.
"People are still just as interested in playing the music they want to hear, there's just less novelty now," he said.
"When I get a game that has 60 tracks in it and I only know 10 of them, that doesn't feel like a very good deal. It's like, 'Wow, really?' And they're not even the 10 songs I would pick, they're just the ones I know.
"So that's the problem. And I think we've changed that model, [the other publishers] are basically on a path to make it more core, even harder and harder to play, teaching you how to play a guitar... I don't agree with it as a philosophy, I think it's the opposite, I want to open it up to more and more people."
InstantJam is currently in closed beta and will available for all users within the next few weeks.
> Feature: InstantAction introduces InstantJam