Quickfire goals from Troy Deeney and Nathaniel Chalobah towards the end of the first half put Watford in control before substitute Harry Kane pulled one back for the hosts just after the hour mark.
"The two goals, at the time that they came, knocked us for six. It affected the players visibly" said Pearson. "And we could have conceded another one before half-time as well.
"The second goal was a quality strike and there wasn't a lot we could have done about that in all honesty.
"We had a go in the second half and it's just not happened for us again.
"We had to make a fist of it in the second half and I thing we did. I think the players worked hard to try and get back into it but, again, it just didn't happen for us.
"We couldn't have got any more attacking players on the pitch and I think the players have given everything again, I couldn't have asked for much more from them.
"But it wasn't enough and unfortunately that's been the story too often this season, and that's a shame because there's been a lot of good things about us this season.
"However, we haven't won enough tight game and our run since early February has been really damaging."