Opportunities were in short supply following the German's 53rd-minute header, however, the result making City 11 points back from league leaders Chelsea, while Arsenal are seven points outside the Champions League qualification spots.
He told Sky Sports: "We want to win, but we were not able to make a ideal performance".
"From my experience in Spain and Germany and now here, you can not imagine how good the young players here are", he said.
For the Gunners, sights have been lowered to a top-four finish but they're now out to 7/2 with Sky Bet, who make City as big as 25/1 for the title. For Arsenal it is the same. "We know what we have to do against Chelsea. With Yaya it was better", he added, referring to the tactical introduction of midfielder Yaya Toure in place of forward Raheem Sterling at half-time.
Guardiola praised stand-in right back Jesus Navas, who applied himself manfully despite the ominous prospect of a tussle with Alexis Sanchez, though the City winger's cameo in defence only served to highlight the paucity of options.
"We played better second half than first, after the first goal we forgot to play". It's so hard. We were not able to win.
"Always we try to make a game; we have to make a game".
"Clearly only at that time in the season... it's not good enough for us".
City only reasserted themselves after Walcott poked home an equaliser, and were unable to rouse themselves in the second half to push on and secure all three points.
Asked about a late incident which saw City appeal for a penalty against Nacho Monreal for handball, Guardiola said: "I spoke to Monreal at full-time about the penalty". All for just £16.99.