GB soon found themslves 4-0 down in the opening set and Argentina then got out to 9-3 and 12-5 before Britain started a fightback, with Dami Bakare twice finding the ground and Chris Lamont also shutting down the dangerous Pablo Crer at the net.
And although Argentina always had it in their arsenal to pull back away from their hosts - Facundo Conte taking it to them - Britain remained competitive, with Bakare inspired off the floor.
Luck was not on their side either, with Mark Plotyczer's block on Crer inching out, but Argentina did not need fortune and, despite towering spikes from Jason Haldane and Mark McGivern, took the set 25-18.
GB started the second set better than they had the opener, leading 2-1 when a Crer serve went long, but they were quickly 7-3 down when Conte's serve knocked Andrew Pink off his feet and Dan Hunter made a reception error.
But Bakare got his arm moving again to spike twice back to 6-9, although Argentina always retained the ability to rack up points on the reel and, thanks to their brilliant libero Alexis Gonzalez, they were soon 13-6 ahead.
But a Chris Lamont block started a run of five straight British points which included brilliant retrievals from McGivern and Joel Miller and when Pink rose to tip a winner, it was 12-14. Bakare got wild, though, and spiked wide and another long run of Argentinian points followed.
Even then McGivern and Pink refused to give in and touched the floor with more power-hitting, although their efforts were ultimately in vain as Rodrigo Quiroga spiked to 25-18.
Having not won a set all Games, it was always unlikely that GB would recover three of them and they started the third as though they knew it, falling to a 7-11 deficit despite a Kieran O'Malley spike.
The majority of their points were coming from poor Argentinian passing, though, and when a Sebastian Sole serve was allowed to land a yard inside the line, it summed up the day for the hosts.
Bakare offered some resistance up high but whether it was he, McGivern, Pink or Jason Haldane who leapt above the net, they found Crer, Sole and Ivan Castellani waiting for them as Argentina saw it out 25-15.