Manchester City's season stands on the brink following a demoralising Champions League exit at the hands of familiar foes Real Madrid.

Having endured a trophyless campaign last term, an opportunity of ending that barren run has vanished for City after being knocked out of Europe by Real for the third successive season with a 5-1 loss on aggregate.

Pep Guardiola's side can put things right on Sunday against Arsenal in the Carabao Cup final at Wembley.

Another defeat could send their season spiralling.

Against Real, Federico Valverde's first leg hat-trick did the damage, while Vinicius Junior's double in the return game at Etihad Stadium following Bernardo Silva's sending-off rubber-stamped an authoritative performance from the 15-time champions.

"It is difficult once you are 4-0 down and playing 10 men against 11. But we did everything," boss Pep Guardiola told Amazon Prime.

"We have an extraordinary team and an extraordinary group of players. The future is bright. It's a little bit of a learning [curve] but it should have been 11 against 11. But we never know. Maybe we lose 6-0 but it's a fact."

This particular run of seven games will define City's season on all four fronts - losing twice against Real means their trophy prospects have been reduced to three.

That could be down to two on Sunday with a huge clash against the Gunners, who are hungry to rid their tags of 'nearly men' by ending a trophy drought which stretches back to 2020.

"On Monday [after Carabao Cup final] hopefully we will wake up and it is a sunny day," said Guardiola. "It is not crucial, it is a football game, we are going to try to win with a good performance.

"We will challenge against the best team in England so far, the best team in Europe because look at their results in the group phase, they were first and have lost three or four games all season. We will challenge them and we have to see how we are competing against them."

City were held to a surprise 1-1 draw at relegation strugglers West Ham, which has left them nine points off the pace in the Premier League with eight games to go - and a monumental effort is required to overturn that particular deficit.

And the FA Cup is no formality either, with City hosting rivals Liverpool in the quarter-final on Saturday 4 April after the international break, with league games immediately after against Chelsea and Arsenal.

Guardiola said: "After one or two weeks, we play against them in the Premier League and it is a good mirror to see what we have to do to achieve [like] them. I am old enough to see that one football game is not the big happiness or a loss is the end of the world, it's just a game.

"In the end, the results have not been good except Newcastle but I have the feeling we are an extraordinary team with many, many, many good things that I love.

"We are still not complete, we are not aware in certain moments and departments, we have to be more clinical but my feeling is it is a question of time."

The last-16 tie loss means Guardiola has failed to reach the quarter-finals of the Champions League for the second successive campaign.

Could this be the final time he takes charge of City in Europe's elite club competition?

There is growing uncertainty over whether the Spaniard will remain at the club beyond this season, while it is understood City have started the process of identifying candidates to replace him.

"I want to retire in 10 years," Guardiola said when asked about his future. "I will always, [like with] City, the Champions League, I will say I will be back because I am part of that.

"Like at Barcelona and Bayern Munich, when I have been there I am part of it. I am incredibly attached to that club, that organisation because it has been one decade, and when I say 'we' it's because I am part of that, I am part of that.

"Listen, when we are out [of the Champions League] and [with] our position in the Premier League, we are still not a complete team, that is the reality. I am not going to [deny it]."