Everything's different depending on who you're dealing with... but the reason you put a time limit on it is so you don't end up with people procrastinating (I.E., everybody in the pinball design business except Stern and Charlie, basically) and tying up your license for years.
So from Rob Zombie's perspective, if this is for 3 years, they're done after 3 years and if someone wants to make, for instance, a pinball ap game with his license he's free to sign a new deal with that person.
Of course you could probably extend it (unless there's another deal that prohibits it) but it wouldn't make good sense for Rob to just leave his contracts open ended like that, it would limit his possibilities down the road.
If he would have signed an open ended time commitment, like for instance, you have the license to make 1000 machines... a company could string that along and still be selling them brand new 15 years from now because they only built 20 a year. If 10 years from now Stern wants to work with Rob to do something, they're not going to want to do that if another company is still manufacturing games with his license. Etc.
Much better to make contracts as specific as possible, in about every way possible, so there's no misunderstandings, and no hard feelings when the contract plays out exactly how it's written.
BTW Rob Zombie's a pretty smart guy, and you're talking about a license so big he's made money in the music industry, the comic book industry, and even in Hollywood. Big time license here...