City paid the price for the fifth-minute sending off of Dedryck Boyata at Eastlands yesterday as the Gunners ran out comfortable 3-0 winners.
The result saw City drop from second to fourth in the Barclays Premier League as both Arsene Wenger's men and Manchester United overtook them on goal difference.
But Hart feels the performance, which kept City in contention until Alex Song smashed the Gunners' second after 66 minutes, can only yield a positive response.
"Everyone was devastated," said Hart.
"We have been playing really well recently and it is a shame we went down to 10 so early. We were playing against a quality side, so it was to be expected that they would get the result, but I don't think the 3-0 reflects how well we did.
"It was obviously a one-off in that Dedryck got sent off with four minutes gone, so you're playing against one of the best teams in Europe and you're one man less.
"I thought we played really well and drew a lot of positives from it. We are a well-oiled machine now and we are going to push forward from this. We've had a very successful start to the season but stuff like this makes you realise what kind of a league you are in and only something positive can come from it."
Source: PA
Source: PA