Well, I'm a lawyer and even though I have to admit I just don't know how Sweden has decided to regulate the matter the European Directive is clear about it, and Sweden has the obligation of transforming that Directive into a Swedish law. My country certainly did and that's the law I use for my work and the one courts take into account (art. 119 RDL 1/2007). Since it's a Directive and not a European Regulation there could be small differences in the way each country implements it, but the basics should remain the same.
Have a look at:
DIRECTIVE (EU) 2019/771 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 20 May 2019 on certain aspects concerning contracts for the sale of goods, amending Regulation (EU) 2017/2394 and Directive 2009/22/EC, and repealing Directive 1999/44/EC
Specifically at the article 48:
Alright, but that still seems to leave the option open for the retailer to choose repair over replacement:
"The consumer's choice between repair and replacement should only be limited where the option chosen would be legally or factually impossible or would impose costs on the seller that would be disproportionate, compared to the other option available."
The cost to replace a PS5 might be considered "disproportionate" compared to sending it in for repair.
Edit: Here's what the Swedish consumer agency says about it (this particular article is aimed at the seller):
"You have the right to try to remedy the defect. This can be done via, e.g. repair or replacement with another equivalent item. For example, if a shirt has a defect, the best option might be to replace it with a new one. However, if instead the lock to an oven door broken, a repair is probably best solution. Whether the defect is to be repaired or the item will be replaced with a new one, the correction must be implemented “within a reasonable period of time” from the date on which the consumer filed the complaint. A reasonable period of time can be described as the time it normally takes to repair or replace an item in a particular industry.
If you choose to repair the item, you have two repair attempts to fix the defect. If the same defect occurs a third time, the consumer has the right to turn down another attempt. If there are several defects in the item, you may be entitled to perform more than two repairs."
If your company sold an item to a consumer that then turns out to be defective, you are obliged to receive the consumer’s complaint.
www.konsumentverket.se
Are you saying this doesn't comply with EU law?