"It's hard to take, I think we started the game really well, we had possession of the ball, and on their first shot they scored," Sagna told reporters after the game.
"It makes it difficult against a quality team. Now we have to keep our heads up because they are creating a gap."
The loss at the Emirates Stadium has left City, who are third in the table, playing catch up as they are four points behind Arsenal and six adrift table toppers Leicester City after 17 games.
"It's not a blow personally, I want to keep working hard, I want to fight to the end because we have many games to catch up, of course we have a gap now but as I said the league is going to be very long," the former Arsenal player added.
"We have to play them (Arsenal) at home, we have to play Leicester so we have to keep the head up keep working and keep sticking together.
"We need to communicate a bit more, to focus a bit more and to stick together as team a bit more and I think it will be okay."
City host relegation-threatened Sunderland in the league on Saturday, before taking on current leaders Leicester away on Dec. 29.
(Reporting by Nayan Das in Bengaluru; editing by Sudipto Ganguly)
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