The Citizens fell to a second straight defeat in the Absa Premiership, after going down to the Soweto giants on Tuesday evening.
McCarthy did have an issue with the officiating, but also conceded Pirates deserved to win.
"We did fairly well. We had complete control of the game but when you don't take your chances and you have the kind of referee on such a day then it's always difficult," McCarthy told SuperSport TV.
"Best team at the end of the day won. They are in good voice and spirit. They got a lot of quick players upfront and they were clinical when it mattered the most.
"Unfortunately, as against Kaizer Chiefs, we played well again but in the most important areas, the guys seem start panicking, not putting the ball in the back of the net. And if you don't the ball at the back of the net, you don't win games."