I agree with ijack, I believe that the keys are part of an algorithm. once you enter the key it checks the algorithm and verifies if it is correct. Then the game will send the key + computer info or/and your personal info back to the company. Then that key is tied to you and your comp.
This will allow you to install on your computer only.
However, I do think that there is an expiration date on the hardware part because you can always upgrade.
This is just my speculation.