diff --git a/packages/react-native-builder-bob/src/utils/compile.ts b/packages/react-native-builder-bob/src/utils/compile.ts
index 42fcca7b6..c0afdf8e5 100644
--- a/packages/react-native-builder-bob/src/utils/compile.ts
+++ b/packages/react-native-builder-bob/src/utils/compile.ts
@@ -68,11 +68,16 @@ export default async function compile({
   }
 
   await fs.mkdirp(output);
-  await fs.writeJSON(path.join(output, 'package.json'), {
-    // Treat code with ESM syntax as CommonJS if `esm` is not enabled
+
+  if (!esm) {
+    // Ideally we should code with ESM syntax as CommonJS if `esm` is not enabled
     // This maintain compatibility with code written for CommonJS
-    type: modules === 'commonjs' || !esm ? 'commonjs' : 'module',
-  });
+    // However currently NextJS has non-standard behavior and breaks this
+    // So for now we only set this conditionally
+    await fs.writeJSON(path.join(output, 'package.json'), {
+      type: modules === 'commonjs' ? 'commonjs' : 'module',
+    });
+  }
 
   await Promise.all(
     files.map(async (filepath) => {