What causes the shepherd boy to become distracted and, as a result, lose sight of the young man who is holding his money, is that he sees a beautiful sword in a vendor's stall. He was chasing after the man who stole his money, but became immediately distracted upon seeing the sword that he would like to have. He became mesmerized by the sword, thus the man with his money escaped from him and he couldn't see him anymore.
Answer: Michael was playing a game called “The Wild Wild West“, which is a virtual reality strategy game. He was the sherif of the town. During the part where he is at a salon he gets challenged by another sherif whose name is Black-Eyed Jed. When he finally loses he sees a game over screen and finally vanishes back into the loft.