The Sky Blues drew 2-2 at Allianz Stadium with Shandong Luneng after a last-minute goal by Shandong captain Hao Junmin, one that sealed their progress to the next round on the away goals rule after last week's first leg was tied 1-1 in Jinan.

It was a crushing blow for Arnold after an underwhelming A-League campaign, one where his side entered the season as title fancies but ended without making the finals. In typically honest style, Arnold said wholesale changes were needed to recover the club's position.

​"I have to be more ruthless," he said. "I have to forget about developing kids. "It's what I love, but I've got to forget about it. I've got to get the best players I can find. If that means, like a lot of the others clubs, who don't have any kids, that's what I have to do.

"I've always enjoyed developing players and seeing five or six players in the Socceroos squad that I've helped – but I can't do that any more. I have to look at what needs to happen to win."

Arnold said it would still be a hard task telling "probably another five to six players" that they would need to seek a new home in the "next one to two days".

"The worst part of my job is telling players they've got to leave or move," he said. "We had an exceptionally good ACL, but clear in my mind is the A-League and there will be changes. In regards to recruitment, we've started with Alex Wilkinson and Michael Zullo, but there will be another four to five to come."

Arnold said the way the side lost in the final minutes on Wednesday night was symptomatic of a season that promised so much, although he was full of praise for Shandong's star foreigners.

"It probably sums up our season," Arnold said. "The boys were fantastic. I thought we played exceptionally well tonight and you can see the difference in [Diego] Tardelli and [Walter] Montillo. Every time on the ball they were dangerous.

"I can't be prouder – we gave everything we've got. I thought we played exceptionally well tonight and it took a wonder goal to clinch game for them. We didn't lose in either leg and it's disappointing to go out on away goals."

The coach said he was all too aware of what could happen in the closing stages of any game, even though it looked as though Sydney had done enough to hold on.

"I've been in football long enough to know it's not over until the final whistle," he said. "I didn't have any defenders on the bench and with Seb Ryall out, we didn't have any defensive back-ups. We knew they'd throw men forward."

Arnold also questioned whether the red card shown to Zac Anderson for tackling Yang Xu – which tilted the match in Shandong's favour for the final 14 minutes – could have been prevented by the officials.

"I've seen the incident of the penalty, but before that the [Shandong] player was offside, so it should never have occurred," he said. "After that, we were down to 10 men for the last 15 minutes. But I thought we defended exceptionally well and were only beaten by a wonder goal. [Hao] could probably hit that another 10 times and it wouldn't go in once."

Shandong Luneng coach Mano Menezes was bewildered that his team was able to blow penalty opportunities in both legs but still come out on top.

"We knew it was going to be a very difficult game, right from the very first minute when Sydney FC scored," he said. "And then in the second half, we faced the same problem and after we missed the penalty. It's unbelievable we missed penalties, both home and away. This doesn't happen often in the world.

"But we used our techniques and tactics well, and our spirit made us fight right to the end. It's an honour to qualify – for China, for Jinan and for our club. Sometimes one game goal can decide the fate. That's soccer."