Look carefully at the generator. Inside there is a small metal case. Inside that case is a coil of wire (connected to the handle via some gear wheels) and some magnets. The two ends of the coil are connected to output connections. When you turn the handle there is an electromagnetic interaction between the magnets and the free electric charges in the coil of wire, which makes the charges move, so creating a current.

In the simulator in Exploration #2 you moved the magnet, whereas in this example you moved the electric circuit (or at least part of it - the coil). Why do you think this still creates an electric current in the wire?