Sage walked out to a huge roar, as Selhurst Park welcomed the new Manager for the first time before kick-off.
And his side initially made a positive start, with both Eddie Nketiah and Daichi Kamada going close, only for City to get the all-important opener through Erling Haaland.
Palace always offered a threat in an end-to-end contest, but in the end clinical finishing made a difference, which Sage agreed with in his post-match assessment.
He said "I'm frustrated. I think the scoreline is heavy, because we were in this game for 65 minutes.
"We created some chances from the beginning until they scored the third goal. Then the psychology of the game changed.
