What is it? 

User Centered Design (UCD) is a way to think about your product or service's user. It affords the development team the ability to craft a design challenge within a set of constraints that are discovered through research ,  personal experience and more. The most important part about the UCD is to know your user's needs and what their desires are with your product and then  testing prototypes with your defined user base to gain feedback. Then you improve your product/service and do it again. You iteratively develop your solution to the design challenge. 

UCD Process

Why Does That Matter?

By having a design challenge the team's resources can be focused to solving it. The old adage "if you chase two rabbits, you will not catch either one," which means that you must be focused in your pursuits to achieve them and splitting your focus or worse, not having a focus, will result in time and resources wasted. UCD is a method of arriving at a problem that you will then solve. I'm sure we've used products that confused us and we deemed terrible; that might be because they weren't designed well for the users. It could also be said that maybe you weren't the specific type of user intended. 

The most important part is now your development team will have target to aim for. For my team's current game Under Choices, we developed a persona/user story (a fictional person that has interests that would make them  want to play our game). Now when we make design decisions,  we can explain why that was the best decision to make and how it improves the player's experience.  By knowing who our players are and testing our game with them, we can distinguish what is necessary to include for the player to have a good experience and what to omit to avoid bad experiences saving us time and resources and NOT GUESSING.