The Oceanic nation finished bottom of Group C in the Olympics with one point after a 1-0 loss to Belarus and a 1-1 draw against Egypt, who ended up qualifying for the quarter-finals second in the group behind the Selecao.
Nelsen, who joined QPR from Tottenham this summer, was in no doubt that the South American side deserved to take all three points in their final London 2012 group game.
"It's a different level from Egypt and Belarus, no disrespect to them," the centre-back told reporters after the match.
"What we need to learn when we play against teams like Brazil - which is obviously a step up - we need to be a bit smarter.
"Our pressure wasn't good, because we were a bit leggy and when your initial pressure's not good it's like a domino effect. Generally, Brazil, they'll kill you with their goals."
The Loftus Road defender dismissed the notion of retiring from international football prematurely, declaring that he plans to continue appearing for the All Whites until his body cannot take it any longer.
"Maybe, I don't really know. When you get to my age you take it game by game I suppose. I'll keep playing as long as I feel fit," he stated.
Despite the Kiwis' exit from the Olympic Games, Nelsen saw reason for optimism within the current crop of players.
The 34-year-old added: "I think this is the best group that I've seen coming through, there [are] a lot of young players. A lot of them [are] playing at good clubs as well, so they’ll only get better."
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