Luciano Vietto opened scoring for the Spanish giants in the 41 minute before Emile Rowe levelled for Unai Emery's side in 47 minutes as the game ended 1-1 after 90 minutes.
Both coaches blooded more youngsters during the second half, before a 26-penalty shootout in which summer signing Adan had a debut to remember as he made three saves and scored the clinching spot-kick himself as his team came through 3-1. Blame for Arsenal's poor season must be shared by the players-they're the ones responsible for putting in consistent, quality performances-and former manager Arsene Wenger.
Smith Rowe, who turns 18 on Saturday, was playing in his first Arsenal game against top-level opposition and has clearly caught Emery's eye during preseason training.
The 31-year-old, who was a half-time substitute, had a remarkable debut in Singapore after signing from Betis.
The Gunners opened the game in typical manner, maintaining a clear domination of the ball that led to the first chance on 22 minutes, Jan Oblak reacting quickly to Alexandre Lacazette's snapshot at the near-post.
Under International Champions Cup rules, the game went straight to penalties where substitute Atletico goalkeeper Antonio Adan starred, saving three before coolly slotting the victor himself. For me, the most important thing is to be and to create one competitive team. For me, he's a very good person, a very good professional and he has a lot of experience in the football world.
Right-back Hector Bellerin knows what it takes to make the jump from the academy to the first team, and he believes Smith-Rowe could join him in making the step up. Arsenal will start their Premier Campaign against the Manchester City at the Emirate Stadium and the following week the Gunners will take a trip to Stamford Bridge to play Chelsea.