Arteta opted to start with his familiar three at the back with two wing-backs, however the formation left his side lacking creativity in attacking areas.
After a second defeat of the league season, Adams believes now is the time to change the formation.
‘It wins you cup games, it doesn’t win you league titles. If he wants to build for the future.
‘I think he’s got problems with Hector (Bellerin), I think his defending today wasn’t very good at all.
‘But I’d like him to go to a back four. They’ve got Gabriel now, get him a partnership.
‘They’ve been unlucky at the start with (Rob) Holding going down but get them into a back four.
‘They look like they’ve a holding midfielder now who’s got a bit of presence and build for the future.’
Adams was also critical of Bellerin and Bernd Leno for their part in Raheem Sterling’s winner, with the former allowing Phil Foden to run past him, while the goalkeeper parried the 20-year-old’s strike to Sterling for a simple finish.
He added: ‘Arsenal have pressed them and they’ve played around the press very well.
‘Hector Bellerin again, and the goalkeeper, I always look at it defensively.
‘Man City were too good, they passed it around, he (Phil Foden) steps inside Hector too easy.
‘The goalkeeper is pushing it into the danger zone, you’ve got to push it away out of the danger zone, and he’s (Sterling) had a tap-in, which is disappointing.’