Nichol said the All Blacks players are not too concerned about being targeted by the scandal, but they are likely to have concerns about the integrity of their game.
"The players won't be too worried about how it affects them individually, they'll be more concerned about the integrity of the game," he said.
"Competition is about being pure, it's no different from doping or any other form of cheating. You do not want it infiltrated looking to compromise it. That's where the players' heads are at.
"It's a breach of the integrity of sport whether it's information gathered for betting or for another sort of advantage. It's the kind of thing that happens."
Today the Herald revealed the bug only had a battery life of around three days - and was still operational when discovered by All Blacks security personnel - strongly suggesting the All Blacks were the explicit target.
Australian police, who have launched a criminal investigation, are scouring CCTV footage from the Intercontinental hotel in Double Bay to try and catch the culprits.
After what happened in Sydney, New Zealand police said they took "the normal steps to ensure the safety of both spectators and players" for tonight's test between the All Blacks and the Wallabies in Wellington.
"The security of the premise in which the players are staying is a matter to be addressed by the team and or the hotel."
The duty manager at the Intercontinental's Wellington hotel - where the All Blacks are based this week - said she was not allowed to discuss this week's security arrangements or the ongoing police investigation into the company's Double Bay hotel in Sydney.
New Zealand Rugby has previously said it would be inappropriate to comment further while the police investigation continues.
"You've got to take it seriously, Nichol said. "The right thing to do is to get it into the hands of the police, it's a criminal matter.
"It's outside the rules of the game in this situation, potentially a breach of the law."