Microsoft believes that next-generation consoles could sell 1 billion units combined.
The company also wants to sell 25 million more Xbox 360 units over the next five years, bringing its total sales up to 100 million.
"We believe over the next five years we can break a 100 million-unit installed base," senior VP of interactive entertainment business Yusuf Mehdi told OXM.
"That's something we're shooting for, it's not a financial plan as such, it's just rough numbers if you will. To sell another 25 million, half of those will probably come from replacements, but half will come from new buyers.
"And the way we'll break into those segments is by hitting new price points, getting new classes of entertainment to come with the Xbox, and breaking into new customer segments. So you'll see the Xbox 360 continue to exist, even as we launch the next generation Xbox One."
Mehdi went on to address the company's predictions for next-generation hardware sales.
"Every generation, as you've probably heard, has grown approximately 30%," he said. "So this generation is about 300 million units. Most industry experts think the next generation will get upwards of about 400 million units. That's if it's a game console, over the next decade.
"We think you can go broader than a game console, that's our aim, and you can go from 400 million to potentially upwards of a billion units. That's how we're thinking of the Xbox opportunity as we go forward."
Electronic Arts has said that it will support the Xbox 360 and PlayStation 3 with new games until 2017.
Microsoft has promised a major Xbox 360 announcement at E3 in June.
Announced this week, Xbox One - described as an all-in-one "ultimate home entertainment system" - will be launched later this year.
While the system won't require an always-on connection, it must be connected to the internet every 24 hours.
Elsewhere, while Microsoft hasn't fully confirmed its policy on used games, a report suggested the firm and publishers will profit from all second-hand sales.
Xbox One will see 15 exclusive games launch in its first year, including Forza Motorsport 5 on day one.
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Gallery: Confirmed games for Xbox One:Xbox One confirmed games
