Hi Curious,
Yes, that can be the problem. Anxiety or nervousness will kill an erection very fast. It's also likely that he's now afraid it will happen again - which makes it more likely to happen. It's a vicious cycle.
Work with him. If he loses his erection have him do something else to you. Distract him. Take the pressure off of him. Once you "break the ice" he'll likely be OK.
Good luck.
A boy's penis is rather shy. It needs to get used to being out of his trousers, especially when in its most embarrassing state - erection!.
You do not say whether you have had his penis out to play. You need to take it out regularly and masturbate (wank) and suck it. Doing those things often will train it to get to know you and to enjoy being the centre of attention. After that there should be no problem of embarrassment or anxiety on the part of its owner.