There can be no more elegant example of the alienation of the modern workplace than the fact that hundreds of millions of employees across the globe spend their lunch hours pretending to be farmers on the internet. With all the breathtaking and transformative power of the web at their fingertips, armies of workers and young people still choose to spend their online hours growing virtual potatoes on badly animated digital fields.

One of the biggest forums for this activity is FarmVille, the online role-playing game made popular through Facebook, whose players tend and trade digital crops and livestock. Almost 100 million people subscribe to the game, which has just announced profits of $500m (£300m) for 2010. I have an account myself, and have spent many happy hours playing on my virtual farm, although my attempts to grow virtual opium were swiftly curtailed by the virtual CIA.

This week, FarmVille's controlling company, Zynga, has begun a major expansion drive, announcing a new deal with Yahoo and marketing its in-game credits in real-world supermarkets. Zynga's stock is predicted to soar, especially after the launch of CityVille, an urban version that runs along the same principles of clunky virtual enterprise. Because of the extraordinary speed with which FarmVille has become popular, it is tempting to regard it as a fad; but this is no isolated phenomenon.

The internet now boasts several massively popular farm-themed video games: from Farmerama to Happy Farm, where 23 million people in China and Taiwan daily tend their digital crops. Altogether, since 2008, the number of regular players of farm-themed online games across the world has ballooned to almost 150 million – 2.5% of the entire human race.

Most video games have obvious escapist themes, allowing players to immerse themselves in fantastical scenarios such as leading dwarf armies or shooting aliens in epic space battles. FarmVille is not really about escaping to a farm – most of the office workers saving their digital coins to buy virtual tractors would panic were they ever to be presented with an actual pig. Perhaps what the sudden popularity of co-operative farming games shows is that, for many modern workers, the idea of owning a piece of land within a friendly community is now just as inconceivable as pulverising zombie invaders in Resident Evil 4.

Farming games tap into a powerful collective wish-fulfilment fantasy: the fantasy of running your own life rather than being a peasant in the neo-feudal hierarchy of corporate serfdom. The precarity and anxiety of modern labour conditions have become more acute during the financial crises of the past two years, and this is precisely the timeframe in which the craze for these online games took off.

The bitter irony, of course, is that FarmVille itself is a neo-feudal state, where rich virtual landowners exploit the free labour of virtual farmhands to make real profits. For all its evocation of rustic utopia, this and other farm simulations are ruthless markets whose exploitation of human emotion is anything but virtual. Real-world gift cards, now available in real-world supermarkets, can buy FarmVille players in-game advantages such as better "equipment" and more "seeds", and, as with many games, some independent speculators have made huge profits by trading online assets and even running gaming sweatshops to boost their profits. The launch of CityVille may simply be the logical next step in the online industrial revolution.

The stated mission of Zynga is to "connect the world through games" – but rather than connecting the world, online farming games unite it in a compliant virtual fantasy of self-determination that displaces real resistance. Alienated workers pay real money to play out a fantasy of having control over the products of their own labour, but the true tragedy is that, even in the jerky bucolic idyll of FarmVille, they are still working for someone else's profit.