What does "Too bad." mean in English for Spanish?

In English for Spanish, "Too bad." means:

Qué pena.

Listen to "Too bad.": (If you have an HTML5 enabled browser, you can listen to the native audio below)

This is a phrase that is used in the GamesForLanguage English for Spanish Language Game in the following scenes:

• English for Spanish 4, Level 2, Scene 5