Several Reading players went close, one Nicky Forster effort pinged off the underside of the bar, but it wasn't to be their day as they recorded their sixth loss of the season and dropped to twelfth in the league.
After the match Watson told readingfc.co.uk: "We're a bit disappointed that we didn't get something, but we conceded and then they got into the game. The second half got scrappy and we just didn't create the chances.
"You go up there and expect Preston to be a pretty decent side, and I think they got a rollocking at half time even though they were 1-0 up.
"We'd had so many chances in the first half and they came out differently for the second half and it got scrappy."
Reading now have two home games in the space of five days against Bradford City and Millwall respectively. Both sides are struggling so the Royals will hope to get as many points as possible on the board to bolster their mid-table position.
Watson added: "It's Bradford and Millwall now so we'll be looking to take a few points. Our last home result was decent so we'll be looking to do the same again."